Registry
No.
SECURITY CLASSIFICATION
Top Secret,
Secret.
Confidential.
Restricted.
Unclassified.
PRIVACY MARKING
In Confidence
DRAFT LETTER
To:-
Mr Adrian Swire
Type 1 +
From
Mr Steele
Telephone No. Ext.
Department
DSR 11
Thank you for your letter of 15 November about
the possible implications for Cathay Pacific Airways
of our concluding an Air Services Agreement with the
People's Republic of China.
Throughout the long drawn out negotiations with
the Chinese, all of us here have had very much in
mind the importance to Cathay Pacific of their earnings
from Services to and through Taiwan. Indeed, this is
the main reason why the ratification of the agreement
negotiated in 1973 has been held up for the past few
years.
However, it is now six years since full diplomatic
relations were established between Britain and China.
Relations are now very good but it is very much in the
interests of this country and of course of Hong Kong,
that they should continue to develop. Against this
background both we and the Chinese are finding it
increasingly anomalous that there should be no Air
Services Agreement and no direct air link between our
two countries. The fact that we do have frequent air
services with Taiwan makes the position more awkward.
There is also the commercial angle to be considered.
While it is true that until very recently it was unlikely
that profitable services could be operated between the UK and China, the recent upsurge of both business and tourist travel to China now makes the prospect