CONFIDENTIAL
DEPARTMENT OF TRADE AND INDUSTXXX (SP3) THE ADELPHI, JOHN ADAM STREET, LONDON, WC2N 6BQ
TEL. 0360350X 01-217 5542
84
FSR 3164/5
RC Samuel Esq
Foreign & Commonwealth Office
Far East Department
Room 255
King Charles Street London SW1A 2AH
Dear Richard
7 August 1978
020/1
HKK 020
ARCOKED IN RACISTRY . $1
9 AUG 1978
FBD have
have sent
nitari
& will be
HK+
thing
Pela
DENK OFFICER
INDEX
PA
No
있도 PLE
1
2
3
You will recall our earer contacts on the subject of the Draft UK-China Bilateral Shipping Agreement at the time of the visit last November of the Chinese Vice-Minister of Communications Mr Tseng Sheng. The Chinese Minister reached agreement with Mr Clinton Davis of this Department that work on the Agreement would be resumed and he invited Mr Clinton Davis to pay an early official visit to China. We have not taken any subsequent action on the invitation despite prompting
from our Embassy in Peking (eg their Ship Telegram 001 of 23 January) - because we wished to undertake a review of the UK's objectives in relation to the Treaty. This review has taken longer than we would have wished to complete but, following a number of consultations with the UK shipping industry, we are now in a position to consider reopening talks with the Chinese Ministry of Communications. However we first need to take your mind in FCO on the general political dimension and on the particular position of Hong Kong in relation to any Agreement.
Our feeling on the Agreement itself is that, while UK shipping is unlikely to derive much short term benefit from it, the advantages of establishing an "entree" to the Chinese market and of demonstrating, through signing an Agreement, a degree of political commitment to the development of maritime relations with China, justifies pressing ahead with the negotiations. We are particularly conscious of the possibility that Chinese foreign trade may develop rapidly in the light of the policies being pursued by the present leadership.
The Nature of the Agreement
We have considered whether we should try to change the basis of the Agreement to provide for more certain benefits for UK shipping. This would involve aiming for assured parity of carryings as between the UK and Chinese flag (in the bilateral UK-China trade) rather than the vaguer provisions of the present Draft (which mirror provisions in all China's shipping agreements so far with other OECD countries) giving access to the ports of either party, prohibiting flag
/ discrimination,
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