Chopsticks And Goulash In E. Europe

Sprawling alongside the railway tracks at the gritty Jozsefvaros freight depot is one of Hungary's largest outdoor marketplaces.

Russian, Ukrainian, and Romanian traders dash between stalls, buying goods to take back to Cluj, Kiev, or Bucharest. Hungarian bargain-hunters are here too, buying underpriced clothes, watches, or radios at half the price of other shops.

But virtually all the retailers - and their goods - are from China.

Since 1990, after Communists were voted out of power in Hungary, mainland Chinese have been streaming to Hungary in search of a better life. Budapest alone is home to some 20,000 Chinese-speakers. They have set up restaurants, shops, even a newspaper.

From Hungary, the most successful are expanding their operations throughout Eastern Europe and the Balkans - countries with little history of cross-racial immigration.

"Hungary has been a very good place to do business," says Kenneth Li, a Chinese-born businessman who manages a trading company and the Pearl Garden, one of Budapest's most successful Chinese eateries. "It's not yet a very rich country, so there is a demand for the types of basic consumer goods that China produces."

Until 1993, mainland Chinese did not need a visa to enter Hungary, and thousands made the arduous (but inexpensive) nine-day journey across Russia's Trans-Siberian railway - their luggage filled with inexpensive consumer goods to sell in Hungary. Here they found a market for their goods, a convenient hub for trade with less-developed East European countries, and a standard of living far higher than in China.

Many stayed to trade at the Jozsefvaros market, or to open small businesses in Budapest and other towns. Every day, staggeringly long lines of Chinese can be seen waiting in front of the Foreigner's Police Office for residency permits, which must be renewed every six months.

Despite racist attacks and police harassment, Chinese immigrants have built hundreds of successful businesses across the country. Many entrepreneurs first set up restaurants to provide a social, financial, and logistical support base for their extended families. Trade-related activities often follow, once the restaurant is in good order. As in many countries, there's a healthy demand for Chinese food, which keeps more than 30 Chinese eateries in Budapest alone in business. "Chinese food is easy to get Europeans to eat," says Mr. Li. "There is demand everywhere."

But it's not easy going. Hungary's bureaucracy often combines Kafkaesque Hapsburg administration with Communist-era suspicion of foreigners. Rules are changed regularly and local press reports publicize instances of discrimination against nonwhite foreigners, particularly Chinese. A secretive and often murderous mafia operates within the community, largely ignored by local police because they appear to regard non-Chinese businesses as off limits.

While maturing businesses are increasing the Chinese profile in Budapest, sources within the community say that many entrepreneurs are now moving on to other East European countries. The Chinese Embassy declined to discuss the matter, but the Hong Kong Trade Development Council confirms that trade flows are shifting to the Czech Republic and Poland, which are undergoing more dramatic growth. Others are starting companies and restaurants in Romania and the former Yugoslavia.

Roughly two-thirds of all Chinese products coming into the region are brought in by Hong Kong companies, according to the council's public relations officer, Beata Balazs. "The number of companies and the volume of trade from China continue to increase," she says. "Now importers are looking to Bosnia as an important new market for Chinese products brought through Hong Kong."

Li, who has Hong Kong citizenship, has made two trips to the northern Bosnian town of Tuzla to explore trade opportunities. "Now that the war is over, there will be many opportunities for business there," he says.

The vast majority of Hungary's Chinese-speaking residents are from mainland China, although Hong Kong and Taiwanese entrepreneurs - who often arrive with more contacts, capital, and professional experience - operate some of the more successful businesses. There's a certain irony in this, as the Hungarian government tried in 1990 to entice Hong Kong residents to resettle to Budapest's Csepel Island, an industrial neighborhood in the Danube, south of the city.

But those Hong Kong residents looking to leave the British colony before it reverts to Chinese control apparently see better business opportunities in Southeast Asia. "People aren't leaving Hong Kong in any numbers," Ms. Balazs says, "and I haven't seen any coming to Csepel."