TNAG-0781-FCO40-985-Involvement-of-Hong-Kong-in-air-services-agreements-1978 — Page 149

695275

NFIDENTIAL

FM HONG KONG 080907Z NOV 78

Hkka84bb

CONT ENTI 4

INDEX

PA

1978

TO PRIORITY FOREIGN AND COMMONWEALTH OFFICE TELNO.1284 OF 8 NOVEMBER,

INFO PRIORITY, PEKING, D.T.I

REG.ZT: Action To

(633

This does not

conflict with the live agreed with the submission to

ROUTINE: HONG KONG GOVERNMENT OFFICE LONDON. the fred for

D.T.I TELNO, ALLOT 160 (NOT TO ALL) :

U.K/CHINA AIR SERVICES AGREEMENT.

ખ

Carrazzić

2101.1

618

1. ALTHOUGH WE BELIEVE THAT CAL IS SUBJECT TO A GREAT DEAL MORE

GOVERNMENT INFLUENCE AND CONTROL THAN AN ORDINARY PRIVATE AIRLINE, IT SEEMS THAT D.T.1 COULD BE RIGHT IN CLAIMING THAT, TECHNICALLY IT IS A PRIVATE LIMITED COMPANY.

2. BY CHECKING THROUGH CPA, WE UNDERSTAND THAT CAL HAS A REGISTERED CAPITAL OF ONE POINT SEVEN BILLION NEW TAIWAN DOLLARS WITH THE SHARES IN THE HANDS OF FORTY INDIVIDUALS WHO ARE ALL APPARENTLY RETIRED AIR FORCE GENERALS AND PRESUMABLY NOMINATED BY THE GOVERNMENT. THEY ROTATE ON THE CAL BOARD OF DIRECTORS. MONEY BORROWED FROM THE GOVERNMENT HAS TO CARRY THE PREVAILING COMMERCIAL RATE. THERE IS THEREFORE A VENEER OF PRIVATE CONTROL. ON THE OTHER HAND, THE OFFICIAL CHINA YEARBOOK PUBLISHED IN TAIWAN REFERS TO CAL AS THE 'REPUBLIC OF CHINA'S FLAG CARRIER'

THIS HOWEVER IS NOT NECESSARILY A DENIAL OF PRIVATE STATUS, ONLY AN INDICATION OF THE SENSITIVITY THAT IS LIKELY TO ATTACH TO THE

AIRLINE.

3. IT SEEMS THEREFORE THAT, IN TERMS OF ACCURACY, THERE COULD BE

SOME MILEAGE. IN THE FORMULA IN YOUR TELNO.599 TO PEKING. ON THE GENERAL QUESTION OF THE NEXT MOVES, OUR VIEWS REMAIN AS IN MY TELNO.1241. WE LOOK FORWARD TO HEARING THE RESULTS OF THE MEETING

WHICH WAS DUE TO HAVE BEEN HELD LAST WEEK.

MACLEHOSE

FILES. FED. IŁKI GD. MAED

MR.CONTAZ21 MISS BROWN.

c copies Senttо

COPIES TO

HUN & KOME & GOVT OFFICE

SENT TO CADIDOT]

MR BRYANT

CONFIDENTIAL MIRSTABLES CAIR, DOT