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DEPARTMENT OF TRADE

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1 VICTORIA STREET

LONDON SW1H OET

Telephone Direct Line

Switchboard

01-215 01-215 7877

3229

24

CONFIDENTIAL

J W D Gray Esq MAED

Mr. Willingn

Foreign and Commonwealth Office

Gt George Street

London SW1

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Hick 18411

HICK

4 JUN1982

7

considing a redraft. x=24/1

23 June 1982

Dear John,

WP

Mul

D25.6 Pay 2016

UK/PRC AIR SERVICES

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You wrote to me on 16 June enclosing a draft telegram to reflect the discussion we had at your meeting the previous day. Our comments have been held up while we consulted Mr Sproat.

2 We have now had a preliminary indication of Mr Sproat's views, although he wishes to talk to Handley Stevens and me about it in more detail in due course. This is sufficient for us to deal with the draft telegram, and I enclose a re- draft whose main purpose is to expand your original para 2. It also reflects the basic position of this Department, which is that, while we accept that in the light of the views of the Governor of Hong Kong and his Executive Council we cannot proceed with notice of termination, our view remains that, but for the view taken by the Governor, this would still be the right course.

3

I also attach a separate draft telegram to Peking containing a revised draft message from Handley Stevens to Lu. This is referred to in the final paragraph of the

draft telegram to Hong Kong. (WP

4

Finally, perhaps I could make a point on para 3 of Hong Kong telno.646. In the case of air services, we are not challenging the principle that CAAC should have the lion's share of services between Hong Kong and PRC, only the conditions (eg the precise distribution of services between CAAC and CPA, and the way in which CAAC get round the limit on services from Peking by operating through Tianjin). And are not the Chinese demandeurs for more Peking services when they insist on more flights through Tianjin in breach of normal civil aviation practice?

Yours

Rasen

Семоторни

CW ROBERTS

Copies of this letter and the enclosures go to Dick Clift Mark Ellish in FED.

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