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THAT SOME OTHER MEANS SHOULD BE FOUND FOR PROTECTING CAAC'S [
ITION ON THE HONG KONG-PEKING SECTOR. THERE MIGHT, FOR EXAMPLE,
BE A COMMERCIAL AGREEMENT BETWEEN BA AND CAAC. LU SEEMED INTER~. ESTED IN THIS IDEA AND AGREED TO REFLECT ON IT OVER NIGHT.
4.
IN THE COURSE OF DISCUSSION ON THIS TOPIC LU SAI CTHE CHINESE
WERE CONTEMPLATING GIVING BA ONLY QUOTE OWN STOP-OVER UNQUOTE
RIGHTS ON THE HONG KONG-PEKING SECTOR AND THAT THERE HAD BEEN A MISUNDERSTANDING ON OUR SIDE. ROGERS REPLIED THAT THIS POINT
HAD BEEN REFERRED TO AT ONE OF THE PLENARY MEETINGS AND THAT THE
WHOLE OF HIS TEAM UNDERSTOOD THAT WHAT WAS BEING OFFERED WAS
EVERYTHING EXCEPT THE RIGHT TO CARRY LOCAL TRAFFIC. IF THE
CHINESE WERE TO BACK TRACK ON THIS NOW IT WOULD BE A MAJOR SET-
BACK FOR THE NEGOTIATIONS AS A WHOLE.
5. LU ALSO SAID THAT ACCORDING TO HIS INFORMATION THERE WERE CILY ABOUT 10,000 PASSENGERS BETWEEN HONG KONG AND PEKING LAST
YEAR - MOST OF WHOM HAD BEEN FOREIGN VISITORS. THIS EVIDENTLY
COLOURS HIS ATTITUDE TOWARDS POSSIBLE ARRANGEMENTS FOR THE
HONG KONG-PEKING SECTOR. CPA HTRG KONG HAVE THEREFORE BEEN
ASKED TO CHECK BACK URGENTLY ON THE INFORMATION AND CALCULATIONS
UNDERLYING THE FORECAST IN HONG KONG TELNO 626 WHICH WOULD APPEAR
TO INDICATE A MUCH GREATER FLOW OF TRAFFIC THAN THE CHINESE
EXPECT.
6. ROGERS REFERRED TO THE LETTER FROM CNAC, DATED 24 MAY,
REQUESTING A SEVEN MONTH EXTENSION OF CAAC'S PERMIT FOR THE SERVICES BETWEEN HONG KONG ANDCANTON (HONG KONG TELNO 642).
LU HAD EVIDENTLY NOT PREVIOUSLY SEEN THIS LETTER AND WAS SUR-
PRISED BY THE UNEQUIVOCAL STATEMENT THAT CNAC HAD QUOLC BEEN
EXTREMELY SATISFIED WITH THE SUCCESS OF THIS OPERATION UNQUOTE
AND THE EXPECTATION THAT THE DEMAND FOR THIS SERVICE WOULD CONT-
INUE TO GROW. ROGERS SAID HE FELT SURE WE WOULD REACH AGREEMENT
ACROSS THE BOARD WITHIN THE NEXT MONTH AND THAT HE WAS ARRANGING
FOR ONE MONTH'S EXTENSION.
2.
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17. FOR