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THE ORIGINAL HAS BEENIDENTIAL
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EXEMPTION No „27.(16) (4)......
Mr Murray
PS/Mr Blaker
Private Secretary
CHINA: AIR SERVICES AGREEMENT
....AKE 184/2
15 MAYA
По
122
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Mr Lugarnis N-Williams J15.5
PA
Problem
1.
An Air Services Agreement between Britain and China
was negotiated and initialled in June 1973. However, we were
unable to proceed to signature because the Chinese came up with
new demands for political concessions from HMG in relation to
China Airlines of Taiwan, which we were unwilling to make. A
compromise formula was agreed with the Chinese by officials last
month on the understanding that it would have to be put to
British Ministers after the election.
Background
2.
The Agreement negotiated and initialled in 1973 would
have given us a route from London through Hong Kong to Peking,
while the Chinese had a route from Peking or "another point in
China" to London.
Unfortunately, before it was formally signed
the Chinese opened similar negotiations with Japan and insisted on the Japanese conceding a political statement about the status of China Airlines which in turn provoked the Taiwanese to retaliate
by cutting off air services with Japan for about a year. The
Chinese then demanded similar conditions from ourselves (see
Annex A), which we were unwilling to make, largely because these
could have provoked Taiwanese retaliation against the Hong Kong
based airline, Cathay Pacific Airways (which does over a quarter
of its business with Taiwan).
We were therefore unable to procee
to signature.
3.
The matter was not taken any further for some years,
since neither side had a sufficiently strong interest in concluding
an agreement. However, last year British Airways' enthusiasm
for a route to Peking was rekindled by the increasing flow of
business and tourist traffic to China; and the Chinese indicated
that they might be ready to moderate their demands.
CONFIDENTIAL
14.