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4.

This happened at a time when we were heavily engaged

in negotiations with the United States for our new Air

Services Agreement and was shortly followed by the American

approach to the PRC with a view to, among other things,

opening up air services between the United States and China.

It therefore seemed best to bide our time and see how they

got on. In the end, as you know, the Americans became even

more firmly stuck on the Taiwan issue than we had been and

nothing came of their approach.

5. This does not seem to augur well for our own agreement

but we would be grateful for your advice as to whether, now

that the dust of the abortive American approach has settled and particularly in view of our helpful attitude towards the

continuation of Chinese non-scheduled flights to Hong Kong

(Tel Nos 1237 from Hong Kong to FCO and FCO Tel No 958 to Hong Kong copied to you refer), it would be worthwhile taking a suitable opportunity to pursue this question further and

discover whether the comment reported in para 3 above betokens

a real willingness by China to ratify their Air Services

Agreement with us without more ado.

6. I am copying this Teleletter to MAED, HKGD, Steadman in

Civil Aviation Dept DOT and by bag to the Political Adviser

in Hong Kong.

рр Signature

Iain C.OW

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