SECRET (Note:
1 SDIATE
PONG KONG
COPY PEKING
is cleanification is needed for the safe handling of this telegrum in Hong Kong.
UK/PRC AIR SERVICES
At the forthcoming Air Services negotiations with the Chinese we will be seeking a full review of the 1979 arrangements, but
in practice the talks will probably tend to focus on arrangements
to apply for the summer of 1983 with particular reference to
Shanghai and Peking. Although there will probably be a second
round in Peking in March we need to have clear objectives from
the outset.
Department of Trade still consider that the best and possibly the
only means of obtaining permanent rights for CPA to serve
Shanghai and a fortiori Peking is to threaten notice of withdrawal
from the regional CMU at December talks, be prepared to carry out
that threat when talks are resumed as we must expect in March and
in the last resort be prepared to see all regional services
cease at the end of March 1984 unless the Chinese come to terms
as DOT believe they would. March is the best time to put
pressure on CAAC because the summer season is so profitable for
them.
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If you are still not prepared to accept the degree of confrontation
which this course implies, CPA will have to rest content with a one third share of whatever we can agree to be the Hong Kong/Shanghai
market for 1983, and there can be little or no hope of obtaining
for CPA any access to Hong Kong/Peking traffic. As Mr Sproat