4. A HONG KONG FIRM HAS STARTED A THRICE DAILY HOVERCRAFT SERVICE IN EACH DIRECTION TO CANTON (THE PLANE SERVICE IS TWICE DAILY). THE CHINESE HAVE NOT RAISED ANY QUESTION OF RECIPROCITY AND HAVE GIVEN THE FIRM A MONOPOLY FOR FIVE YEARS. THE IR CONCERN OVER THE FERRY SERVICE IS THE SAME AS OURS OVER THE FLIGHTS, NAMELY TO GET THINGS STARTED AND THE CONVENIENCE OF THE TREAVELLING PUBLIC.
5. WE ENTIRELY AGREE THAT THE QUESTION OF RECIPROCITY SHOULD NOT BE ALLOWED TO GO BY DEFAULT, WE HAVE NOT ALLOWED IT TO DO SO. BUT SO FAR AS WE KNOW FOR THE TIME BEING THE TRAFFIC IS NOT COMMERCIALLY
ATTRACTIVE. CATHAY PACIFIC TOLD ME THAT WHILE THEY WERE GLAD WE HAD THROWN DOWN A MARKER, THEY WERE NOT THE LEAST INTERESTED IN SUCH FLIGHTS AT PRESENT. I DON'T KNOW OF ANY OTHER FIRM LIKELY TO BE SO EXCEPT JARDINES. AT THE MOMENT THEY ARE ACTING AS CAAC'S HONG KONG AGENTS AND ARE GETTING PROFIT WITHOUT RISK. SO THE PRESENT SITUATION STRIKES US AS IN PRACTICE PERFECTLY SATISFACTORY AS AN INTERIM ARRANGEMENT.
6. WE THINK IT UNWISE, AT ANY RATE AT THIS STAGE, TO TRY AND USE CHINESE INTEREST IN THESE FLIGHTS AS A LEVER FOR SIGNATURE OF THE ASA. THE CHINESE ARE LIKELY TO DRAW A CLEAR DISTINCTION BETWEEN REGIONAL FLIGHTS TO AND FROM HONG KONG, WHICH WERE NOT COVERED OR ENVISAGED IN THE ASA, AND THE TRUNK ROUTE FROM EUROPE TO PEKING PROVIDED FOR IN THE ASA BUT IN WHICH THE PEKING/HONG KONG SECTOR WAS SPECIFICALLY BLINDED.
7. IN ANY CASE THE CHINESE PROPOSALS, ALTHOUGH STRETCHING THE LIMITS, - COME WITHIN THE FRAMEWORK OF CHARTER FLIGHTS FOR WHICH DCA HONG KONG IS RESPONSIBLE. I SEE MERIT IN MAINTAINING THE DISTINCTION BETWEEN APPROVAL OF THESE AND THE ARRANGEMENTS FOR SHCEDULED SERVICES FOR WHICH THE UK IS NORMALLY RESPONSIBLE AND WHICH WOULD BE THE SUBJECT OF AN ASA. INDEED, NOT TO DO SO WOULD BE SEEN AS DISCRIMINATORY, ON THE GROUNDS THAT THE APPROVAL OF NON-
SCHEDULED SERVICES BY HONG KONG DOES NOT HAVE TO BE TIED TO AN ASA AND THIS WILL BE CLEAR TO THE CHINESE FROM THE PUBLISHED
REGULATIONS.
8. I DO NOT THINK THAT WE WILL BE GIVING ANYTHING AWAY BE AGREEING TO THE CONTINUATION OF THESE NON-SCHEDULED FLIGHTS FOR A FURTHER 3 MONTH PERIOD, PARTICULARLY IF WE COUPLE OUR AGREEMENT WITH THE REMINDER THAT AFTER SOME TIME WE MIGHT WISH RECIPROCITY. MEANWHILE BEFORE STARTING NEGOTIATIONS FOR RECIPROCITY, WITH ALL THE PROBLEMS THAT FORMAL AFREEMENTS WITH THE CHINESE ABOUT HONG KONG INVOLVE, WE COULD ASSESS WHAT THE TRAFFIC AND ITS COMMERCIAL
DOTENTIAL DĽALLY AUQUETS IA AND DISCOVER WHETHER ANY BRITISH