GKS 700
CONFIDENTIAL
FCO 191800Z JAN 79
TO IMMEDIATE PEKING
CONFIDENTIAL
Ник 175
TELEGRAM NO 66 OF 19 JANUARY
31
INFO IMMEDIATE HONG KONG
FROM FED/CRE4
ECONOMIC COOPERATION AGREEMENT: SHIPPING
то
fran.
1. THE BRITISH SHIPPING INDUSTRY WHICH IS A MAJOR CONTRIBUTOR TO. OUR INVISIBLE EARNINGS IS PRESSING HARD FOR ADEQUATE OPPORTUNITIES TO SHARE IN THE EXPECTED TRADE EXPANSION WITH CHINA, PARTICULARLY IN VIEW OF THE EXTENT TO WHICH IT IS SUFFERING FROM THE WORLDWIDE RECESSION IN DEMAND FOR SHIPPING SERVICES. MINISTERS ARE SYMPATHETIC TO THE GENERAL CASE FOR BRITISH SHIPOWNERS TO HAVE A FAIR SHARE OF THE WORLD TRADE. AS YOU KNOW, THE BRITISH FLAG SHARE OF THE CARRIAGE OF OUR BILATERAL TRADE WITH CHINA IS VERY SMALL, AMOUNTING TO 3 BY VALUE OF EXPORTS IN 1977 AND 3% BY VALUE OF IMPORTS.
2. THE MAIN REASON FOR THE LOW BRITISH CARRIAGE SHARES IS CHINA'S POLICY OF CARRYING AS MUCH OF HER TRADE AS POSSIBLE IN HER OWN BOTTOMS SO AS TO CONSERVE HER FOREIGN EXCHANGE. NEVERTHELESS, IN VIEW OF THE IMPORTANCE OF SHIPPING TO THE BRITISH ECONOMY (WE ARE THE FOURTH LARGEST SUPPLIER OF SHIPPING SERVICES) IT SEEMS REASONABLE TO US TO PUT TO THE CHINESE THE PROPOSITION THAT OUR SHIPOWNERS SHOULD HAVE A PROPER CHANCE TO PARTICIPATE IN THE BENEFITS OF THE AGREEMENT.
3. WE HAVE CONSIDERED INCLUDING AN UNDERSTANDING TO THIS EFFECT IN THE MARITIME AGREEMENT. HOWEVER THIS AGREEMENT WILL BE PRIMARILY CONCERNED WITH THE OPERATIONAL ASPECTS OF SHIPPING. MOREOVER, THERE ARE STILL LIKELY TO BE DIFFICULTIES OVER HONG KONG WHICH MAY PREVENT SUCH AN AGREEMENT BEING CONCLUDED. IT IS ALSO POSSIBLE THAT BECAUSE OF THEIR MINISTRY STRUCTURE THE CHINESE MIGHT ARGUE THAT AN UNDERSTANDING OF THE KIND WE HOPE TO OBTAIN WAS NOT APPROPRIATE TO A MARITIME' AGREEMENT.
4. WE WOULD THEREFORE LIKE TO SECURE AN UNDERSTANDING WITH THE CHINESE TO THE EFFECT THAT 30TH OUR SHIPPING FLEETS WOULD HAVE A REASONABLE SHARE IN OUR BILATERAL TRADE, WE NOTE THAT THE FRENCH HAVE OBTAINED A REFERENCE TO MARITIME TRANSPORT IN ARTICLE
3 OF THEIR AGREEMENT WITH THE CHINESE (TEXT IN MEYER (UKREP BRUSSELS) LETTER OF 8 JANUARY, TO MASEFIELD FED, COPIED TO YOU) WHICH MAKES
A SPECIFIC REFERENCE TO
CONFIDENTIAL
/QUOTE
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