CONFIDENTIAL

arrangements on services which do not operate to, from or through

the mainland of China.

FUTURE OF CPA?

79. HMG confident that agreement provides sound frame work within

which CPA can continue to operate and expand. CPA itself has

expressed confidence in agreement.

AIR LINKS WITH TAIWAN?

80. The services between Hong Kong and Taipei depend on

inter-airline agreements rather than arrangements between

Governments. Nothing in the agreement to prevent such links

continuing after 1997.

FUTURE OF HONG KONG - LONDON CABOTAGE ROUTE

81. Confident that British Airways, British Caledonian and Cathay

Pacific Airways will continue to develop their existing frequent

seervices between the UK and Hong Kong.

[IF PRESSED]

After 1997 the services will depend on agreements being negotiated

between the UK and the Hong Kong SAR (for services terminating in Hong Kong) and between the UK and China (for services which operate through Hong Kong to the mainland of China).

CONFIDENTIAL

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