SECRET & PERSONAL
4.
This is one of the reasons why the Governor is concerned to play the Air Service game very cannily. It is not so much a question of giving the Chinese the opportunity to score air service points by claiming sovereignty. They already do claim it and it is not impossible that this might colour their attitude to the regional services. We have to avoid this spilling over into the question of 1997 souring the atmosphere for the wider discussions. I know that one can argue over the likelihood of this happening, but I do not think we can rely on CAAC handling the matter in isolation, and necessarily taking their own decision to give way to us. We agreed that it was right to give Hong Kong the chance to assess the risks in this and I am sure we must respect their judgement. (Incidentally there is no doubt in my mind that Teddy Youde was right (and indeed had no alternative) to consult EXCO on an issue with such difficult political implications.)
5. So, while I naturally take your point about the wider UK interest from the air services angle, we have to feed this in as one factor in working for a satisfactory Hong Kong political settlement. We should of course work to maintain our responsibility for Hong Kong in civil aviation matters. It is indeed to the advantage of both Hong Kong and London to do so and I am sure that Ministers will put considerable weight on this. But I hope you will agree that to get the best deal possible, in this and other areas, we have to play a clever hand, carefully pitched to take account of the Chinese position and the likely political pressures within the Chinese leadership.
6.
The conclusion must I am afraid be that any tough line on air services between Hong Kong and China has to be limited by political considerations.
Although the Prime Minister's visit in September may start things off it is very unlikely to tie them up. So uncertainty could last for months or even
years.
7. I hope we can keep in close touch on all this. I have written frankly on a subject which is handled on a very restricted basis within the FCO. I should be grateful if you would regard this as for your personal information. But I should be very glad to discuss the question further with you if this would help.
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SECRET & PERSONAL
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Your sincerely,
Alan Donald
A E Donald