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CONFIDENTIAL
IMMEDIATE HONG KONG GOVERNOR
COPY IMMEDIATE PEKING
(WP)
Your Tel 607:
UK/PRC Air Services
1 We think the Executive Council are deluding themselves
if they believe that air services between Hong Kong and
China can be improved by means of consultation and
political pressure not backed by any form of firm action.
2 They are right that Tianjin/Nanjing services do not
contravene the letter of the CMU. Equally of course,
on a strict interpretation of the CMU, Cathay have no
right to fly to Shanghai or any other point in China,
because they also serve London. This right has only
been sustained in the past by confronting CAAC with a
mutual suspension of Shanghai services, which duly
produced agreement, albeit at some cost.
3 If we now concede 4 services to Tianjin and 3 to
Nanjing as proposed, when it is clear that these actually
serve Peking and Shanghai we shall be allowing CAAC not
only to disregard the terms of their permits but
also to circumvent the only aspects of the CMU which
constrain them, namely the restrictions on services to
Peking and Shanghai. There will be nothing to stop them
continuing to meet increased demand for services to