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individuals
certainly funded by
and organisations with close
connections with the PRC. They are rumoured to have powerful supporters in Peking and rivalry between CAAC, who would like CPA to be the only Hong Kong carrier into China, and Dragonair's supporters could have been one of the reasons for the unsatisfactory conclusion to the first round of Air Service
talks. Dragonair would like to operate scheduled services between Hong Kong and China but cannot be designated to do so as a British airline because they do not meet the requirement
in the existing Sino-British ASA of being substantially owned and effectively controlled by British nationals.
}
Hong Kong/Australia Air Services Agreement
9.
The Civil Aviation section of the Hong Kong Agreement provides for the Government of the People's Republic of China after 1997 to delegate to the SAR Government the right to renew
ог amend existing ASA s and negotiate new ASA s involving
services to and from Hong Kong. As part of the preparations
for 1997 we need to unscramble ASAs between the UK and other
countries which cover services between those countries and
Hong Kong in such a way that services to and from Hong Kong appear in new agreements separate from those involving services to and from the UK. For sovereignty reasons the Chinese would: not accept, after 1997, that Hong Kong should operate services deriving from agreements signed by the UK. We have started
talks with the Australians to this end. Australia was chosen
as the first candidate for these negotiations because of the helpful support which they have given at a a political level to the Joint Declaration and because the ASA in question is a
relatively simple one to "unscramble".
10.
The Australians have however indicated that they are nervous about signing an agreement with Hong Kong unless they can be certain that the Chinese have no objection to this. They have proposed that we they should approach the Chinese
to check this point. We have sought to reassure the explaining to them that the whole idea of:
Australians by
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