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HKK 182/1

нск 18211

Foreigy and Commonwealth Office

RECEIVED IN REGISTRY NO. 51 30 SEP 1980

DESK OFFICER

INDEX

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PA £1.10.

MAGISTRY Action Taken

Sir Murray MacLenose GBE KOMG KCVO AW

Governor and Commander-in-Chier

HONG KONG

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Dear Sir Murray

London SW1A 2AH

30 September 1980

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See HRK 182/1 @1982

REPLACEMENT AIRPORT FOR KAI TAK AND THE FUTURE OF HONG KONG

1.

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BA

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Thank you for your letter of 11 September referring to Iain Orr's (in the event not David Jeaffreson's) letter of 12 September on this subject. We were grateful to receive the text of Orr's letter and enclosed paper in Hong Kong Telegrams Numbers 1172 and 1173. We have also seen Peking Telegram Number 86 to Hong Kong.

Should Replacement be on Lantau or in China?

2.

On this key point, we agree with you and Peking that the arguments are very strongly in favour of a Lantau site. The disadvantages described in your background paper of putting the airport in China all seem valid to us. The Legal Advisers confirm that the interpretation of the Chicago Convention on Air Traffic Rights is correct. We can see very serious problems arising if sovereignty over the airport were outside Hong Kong and we see no prospect of concluding a satisfactory agreement with the Chinese on sharing air traffic rights.

3. We are also very concerned at the risk of having Hong Kong's main airlink across the border. However stable the present administration in Peking may seem, it would be pretty irresponsible to act in so important a matter on the assumption that there will be no change and, as you rightly point out, this means that Kai Tak would have to be kept at least in mothballs, thus greatly reducing the advantages of the scheme. On the other side, there is also surely a lot to be said in favour of the associated development of Lantau which would result from the siting of the airport there. From the point of view of Hong Kong's economic future there must be considerable advantage in retaining so attractive a focus of investment within the borders of the Territory.

Finance

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4. This is obviously going to be a very tricky problem and, as you say, is tied up with the question of the future. We agree that there would be advantage in discussing the subject with the Chinese. It was interesting that Gu Mu, in talking to Philip Haddon-Cave in May, mentioned not only an airport across the border but also the

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