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*STRY NU.
2.6214 AUG 19/8
69
CONFIDENTIAL
Ramsay
DEPARTMENT OF TRADE AYDINECLEX (SP3) HEADELPHI, JOHN ADAM STREET, LONDON, WC214 630
TEL. KAXMOX 01-217 5542
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You will recall our earlier 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 Ir seng Sheng The Chinese Hinister 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. lie 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 hinistry of Communications. However we first need to take your mind in FC 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 "ent ree" to the Chinese market and of demonstratin through signing an Agreement, a degree of political cormitment to the development of maritime relations with Chim, justifies pressing ahcad with the negotiations. We are particularly conscious of the possibility that Chinese foreign trade my develop rapidly in the light of the policies being pursued by the present lenderchip.
The Nature of the Agreement
We have considered whether we should try to change the basis of the Agreement to provide for more certain benefita for I shipping, This would involve aiming for ascured purity of carryiruse in babienn the UK and Chinese flag (in the bilaterd UN Ching trade) rather than the vaguer provisions of the present Draft (which mirror provisions in all China's shipping agreements so far with other 0.0 countries) giving access to the ports of either party, prohibiting flag
/discrisition,
CONFIDENTIAL
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