4. GAO SPOKE OF THE NEED FOR COMPETITIVE RATES. HE SUGGESTED THAT THE PROBLEM OF IMBALANCE IN THE CARRIAGE OF FREIGHT MIGHT
E SOLVED BY MAKING SUITABLE PROVISION FOR TRANSPORT IN PURCHASING CONTRACTS, PROVIDED THAT RATES OFFERED WERE COMPETITIVE.
5. 1 WELCOMED GAO'S OFFER OF TALKS, AND SAID THAT I HOPED THAT THIS COULD BE FOLLOWED UP SOON. MY CONCERN WAS HOWEVER TO IMPROVE THE ENVIRONMENT WITHIN WHICH SHIPPING COMPANIES COULD OPERATE AND TO ESTABLISH A EQUITABLE BASIS FOR SHIPPING. TO THAT END WE HAD PROPOSED THE EXCHANGE OF LETTERS IN THE CONTEXT OF THE ECONOMIC COOPERATION AGREEMENT. THERE SHOULD BE ROOM FOR ALL WITH THE EXPANSION OF CHINA'S FOREIGN TRADE.
6. GAO DID NOT SEEM TO RULE OUT THE EXCHANGE OF LETTERS UND I AM WRITING TO HIM TO SET OUT OUR PROPOSALS
ONCE AGAIN BUT I THINK THAT WE SHALL HAVE A LONG HAUL ON THIS. SINCE THE MARITIME AGREEMENT IS DEALT WITH IN ANOTHER NECK OF THE WOODS, IT SEEMS PREMATURE TO TALK OF A PACKAGE, ALTHOUGH THIS MAY EMERGE LATER.
7. OBVIOUSLY THE CHINESE FOB/CIF SYSTEM OF CONTRACTS WITH RIGID ALLOCATION OF SHIPPING IS A MAJOR FACTOR. BUT IT IS DIFFICULT CREDIBLY TO PURSUE THIS ISSUE IN A VACUUM, WITHOUT EVIDENCE OF STRONG INTEREST ON THE PART OF BRITISH SHIP OWNERS IN PROVIDING SERVICES. THE IDEA OF A VISIT SHOULD THEREFORE BE PURSUED.
8. SO FAR AS RELATIVE COSTS ARE CONCERNED GAO WAS FIRM ON THE NEED FOR COMPETITIVENESS IN ALLOCATING SHIPPING SPACE. CHINESE RATES MAY STILL BE BELOW CONFERENCE. BUT RICKMERS PRESUMABLY STILL SHOW A PROFIT ON THEIR REGULAR SAILINGS. GAO SAID THAT NO PREFERENCE WAS GIVEN TO CHINESE CARRIERS SIMPLY BECAUSE OF THE SMALLER FOREIGN EXCHANGE BURDEN THEY ENTAILED, THERE SEEMS THEREFORE TO BE SCOPE FOR BARGAINING.
9.
MAED REGISTRY PLEASE PASS TO SAMUEL, FED AND PRYOR, SPD, DOT.
SIGNED TIMOTHY GEORGE
NNNN
TKGD
Ho/ AKGL
Please