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INCL

CURRENT ASA TALKS, AND AN EXTENSION TO THE END OF THE YEAR WAS NOT CONSISTENT WITH NORMAL AIRLINE SCHEDULING PRACTICE, KEEP SUGGESTED THAT SINCE THE NEXT CANTON TRADE FAIR WAS TO START

IN OCTOBER, AN EXTENSION OF THE TOP TO 30 SEPTEMBER WOULD APPEAR A REASONABLE COMPROMISE. HE WOULD BE WILLING TO APPROACH THE UK ALONG THESE LINES. THIS WAS AGREED BY THE DELEGATION.

5. WE ACCORDINGLY RECOMMEND THAT THE TOP TO CAAC BE EXTENDED TO 30 SEPTEMBER 1979 FOR ONE REPEAT ONE RETURN SERVICE PER DAY BETWEEN

GUANGZHOU AND HONG KONG WITH RIGHTS FOR PASSENGERS, CARGO AND MAIL. SINCE THE HONG KONG/GUANGZHOU SERVICE IS PART OF THE PACKAGE NOW UNDER NEGOTIATION IN PEKING, WE SEE NO MERIT IN EXTENDING THE TOP ON A MONTH-TO-MONTH BASIS.

6. YOU MAY BE INTERESTED TO KNOW THAT IN REPLY TO AN EXPRESSION OF HOPE FOR AN EARLY CONCLUSION OF AN ASA EXPRESSED BY KEEP, LIU SAID THAT HE HAD JUST HEARD OF QUOTE IMPROVEMENTS UNQUOTE AT THE PEKING MEETING, AND THAT CNAC ALSO HOPED AGREEMENT COULD BE

REACHED PRIOR TO CHAIRMANS HUA'S VISIT TO LONDON.

7. WE SHOULD BE GRATEFUL FOR AN URGENT RESPONSE TO THE REQUEST AT

PARA 5.

CATER

FILES: MAED

FED

HK & G D

KR CORTAZZI MR BUTLER MR MURRAY

[COPIES SENT TO CAD/DOT]

COFIES TO:

HONG KONG GOVT OFFICE, LONDON

MISS BROWN

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