GP 450 CONFIDENTIAL

CONFIDENTIAL HKK 184/2 TH

FM PEKING 010712Z MAY 79

TO IMMEDIATE HONG KONG

TELEGRAM NUMBER 41 OF 1 JUNE 79

RECEIVEOMA BAGAL NO.

DECK OFFI MIDEX

No

FOR JEAFFRESON FROM KEEP. UK/CHINA ASA NEGOTIATIONS.

1.

ROGERS WAS CLEARLY VERY DISTURBED BHEKT TELNO 317

A

OF 30 MAY. IT IS DIFFICULT TO ASCRIBE A REASON FOR THIS OTHER THAN HIS AVERSION TO HAVING HIS NEGOTIATING POSITION CLEARLY SPELLED OUT.

3. TAKING THE OBJECTIVES LISTED IN THE TELNO 317 ONE BY ONE:- A. THAT AN EQUAL NUMBER OF POINTS SHOULD BE SOUGHT AT THE EXPENSE OF EQUAL CAPACITY WAS RECOMMENDED IN PEKING TELNO 500 OF 29 MAY PARA 1.

B.

THAT THE CHINESE SIDE WAS NOT AVERSE TO A REVIEW AFTER ONE YEAR OF OPERATIONS WAS REPORTED IN PARA 2 OF THAT TELEGRAM. C. THAT ROGERS SHOULD PRESS FOR FULL RIGHTS FOR BA WAS RECOMMENDED BY ROGERS IN PARA 3 OF THAT TELEGRAM AND AT PARA 4 OF PEKING TELNO 499 OF 29 MAY.

4

APSKT FROM REQUIRING ALL THREE OBJECTIVES BE MET AT THE SAME TIME, THE ONLY NEW REQUIREMENT IN FCO TELNO 317 IS THE SPELLING OUT OF THE PURPOSE OF THE REVIEW (ITEM D OF PARA 1) AN OBJECTIVE WHICH IS FAVOURABLE TO HKG. IT IS PERHAPS SIGNIFICANT THAT ROGERS OMITTED ANY MENTION OF LU'S REACTION TO THIS POINT AT THE BRIEFING ON THE AFTERNOON OF 31 MAY. I HAD ONLY BEEN ABLE TO GLANCE AT TELNO 317 J THAT TIME AND THEREFORE OVERLOOKED QUESTIONING HIM ON THIS POINT.

5.

NEVERTHELESS, THE MOOD OF THE UK SIDE OF THE ''TEAM'' IS THAT TELNO 317 HAS SET THEM A VERY DIFFICULT IF NOT IMPOSSIBLE TASK. IN VIEW OF THE ABOVE ANALYISIS I CAN ONLY CONCLUDE THAT THEY HAVE SOME CONSIDERBLE AVERSION TO THE NEW SET OF OBJECTIVES (WHICH ROGERS TENTATIVELY ASCRIBED TO THE POLICIES OF THE NEW GOVERNMENT - PARA 3 OF TELNO 317 BEING RELEVANT) THESE OBJCTIVES SEEMINGLY BEING DIFFERENT FROM THE ORIGINAL UK POLICY LINE WITH RESPECT TO THESE NEGOTIATIONS.

THE ORIGINAL

POLICY HAS SEEMED TO MILES AND ME TO BE ONE OF OBTAINING FULL TRAFFIC RIGHTS BETWEEN HONG KONKSAND PEKING FOR BA IN PERPETUITY AND AT ANY EXPENSE, IN AIR SERVICES TERMS.

CONFIDENTIAL

16.

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