In response to a question about the transformation from Yugoslavia to Serbia and Montenegro, Zhang said China always respected the choice of the Yugoslav people, and welcomed the efforts taken by all parties concerned within Yugoslavia for properly handling internal relations.

China hoped and believed the decision would help safeguard the stability of Serbia and Montenegro, and ease the tension in southeast Europe.

Zhang said the Chinese Embassy to the Federal Republic of Yugoslavia had been renamed as the Chinese Embassy to Serbia and Montenegro since the founding of the country.

The existing bilateral treaties and agreements between the two countries would continue in effect, and the rights and obligations shared by them would not change, said Zhang.

The two chambers of the Yugoslav parliament on Feb. 4 separately passed a new constitutional charter, which marked the dissolution of Yugoslavia and the founding of Serbia and Montenegro.

Under the charter, Serbia and Montenegro will have a president and central parliament, but both republics will have the right to hold a referendum on independence after three years.

Serbia's capital, Belgrade, will remain the capital of the new union, but some joint institutions will be based in Podgorica, Montenegro's capital.

The new union will have one army, but two currencies, with Montenegro using the euro and Serbia sticking to the dinar.

(Xinhua News Agency February 9, 2003)