and could call our bluff, in which case we could be
left with no memorandum at all and in a position where Chinese 'face' over Hong Kong's status was at stake. My conclusion is therefore that any threat of withdrawal
from the 1979 confidential Memorandum of Understanding involves a risk which would not be justified in the
circumstances.
3.
There does, however, in any case seem to be
scope for successful negotiation on the lines of the
second option you mention. The demand for air movements
between Hong Kong and China is expanding. I see no reason
why we should not argue strongly that it should be filled
on a balanced basis between British and Chinese carriers.
In taking this line we should make it clear to the
Chinese that we would not agree to any increase in flights
by Chinese carriers if there was no increase for
British carriers. There is, I believe, some reason to
think that this approach might work: the Chinese agreement
to an early meeting represents a sudden shift in their
ground which may indicate that they are looking for
something from us. If this proves to be the case, it
should be possible to exploit the situation to the
benefit of our airlines.
Foreign and Commonwealth Office
3 December 1982
CONFIDENTIAL
لا
(FRANCIS PYM)