CONFIDENTIAL
Thus wen
Kurman of the train.
this manoeuvre while BA would certainly lose by having to use
an uneconomic routeing. There would be no point in pressing
be so
for a meeting before September/October and we should not
expect to make any progress unless and until CAAC want
additional rights to and through Hong Kong e.g. across the
Pacific or to other points in S E Asia. This may be some
years ahead and by then the value of their position on
services between Hong Kong and points in China could
great that they would not be prepared to jeopardise the
status quo in order to obtain such rights anyway.
Indeed this could already explain why Lu did not pursue
CAAC's earlier interest in such rights at the review
negotiations last March.
Of the two ways to make some impression on CAAC we should be
on stronger and less controversial ground in giving notice of
termination of the CMU than in attempting to curtail the
Tianjin and Nanjing services. It is not particularly unusual
or necessarily provocative to terminate such understandings
when they no longer meet our circumstances although it would
be foolish to suppose that the negotiations to replace it
would be other than keenly fought on both sides. Strong nerves
would be needed at the end, but having seen the arguments
set out in paragraph 1 of your TUR and paragraph 3 of Peking
Tel No 330 it remains our view that a renegotiation of the
regional CMU need not have adverse consequences for relations