CONFIDENTIAL

objections to such a proposition.

I hasten to add that I am not looking for a reply before the Chinese arrive here on 20 July (or 3 August); the question is at present hypothetical but I think what Brian Keep must have had in mind is that it will take a lot more than an offer of trans-Pacific rights to extract from the Chinese the kind of access to China which CPA want.

4 I have discussed this with Christopher Roberts and our preliminary views are that while it might be difficult to resist pressures from others to compete on the London Hong Kong route if we granted access to the Chinese, it would not be impossible to do so. However one defines it, China manifestly have a special relationship with the territory which no other country could claim. On the other hand it wouldbe ironceivable to grant access to CAAC so long as Laker is denied; who knows, perhaps CPA would be prepared to accept Laker and CAAC on the London Hong Kong route if that were the price of a really significant improvement in their access to China. But these are essentially civil aviation considerations. Before we even begin to weigh them up in the usual way, it would be most useful to have a political appreciation of the factors involved in any question of granting rights to CAAC on the cabotage route between Hong Kong and London.

H MG Stevens

Your

ever,

Handley

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