TNAG-0643-FCO40-791-Involvement-of-Hong-Kong-in-air-services-agreements-1977 — Page 137

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HMG found some of the above copditions unacceptable as they would have been

likely to cause Taiwanese retaliation against Cathay Pacific Airways' very

important services between Hong Kong and Taiwan (worth £31m to CPA in 1976):

and the Chinese therefore declined to ratify the agreement.

3

In August 1975 an effort was made to go some way towards meeting the

Chinese by offering them assurances, on a confidential basis, that the UK do

not recognise CAL, as a state airline nor the insignia, emblem or flag that

it uses as those of a state'while any aviation link between the PRC and the UK

would be governmental and inter-state, the existing link between Hong Kong

and Taiwan is non-governmental and regional. However, in spite of our Ambassador's

strong urging that the Chinese accept these assurances, which we considered to be

quite as good as those accepted in the case of Japan, the Chinese turned them

down (in March 1976) explaining that their position was unchanged in insisting on

the 5 points in paragraph 2 above.

4

British Airways' interest in operating services to Peking has diminished

since 1973 because of the experience of other airlines' operations to China,

which have proved commercially disappointing. Nevertheless we would welcome

the conclusion of an Air Services Agreement so that flights could begin, without

further negotiation, once British Airways consider them commercially desirable.

5 At the ICAO Special Air Transport Conference in Montreal in April 1977,

British officials had informal contacts with the Chinese delegation.

When

it was mentioned that the Air Services Agreement negotiated in 1973 had not

been ratified, the leader of the Chinese delegation said that there should be

no difficulty over signature now, it is, however, not clear how much weight

should be attached to this statement given the informal context in which it

was made.

2

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