(161)
CRS 49
CONDIFENTIAL
FM PEKING 1159907 JUN79
CONFIDENTIAL
AKK 184/2
RECEIVED IN REGISTAM
12 JUN 1978
DESK OFFICER
INDEX
51
A51
Y
PA
Action sen
TO IMMEDIATE FCO
No
TELEGRAM NUMBER 546 OF 11 JUNE.
(162)
INFO IMMEDIATE HONG KONG.
MIPT: AIR SERVICES NEGOTIATIONS.
1.
HEAD OF CHANCERY CALLED ONACTING DIRECTOR OF WESTERN
EUROPEAN DEPARTYENT WANG BANZOU ON 11 JUNE TO SEEK MFA'S
HELP IN GETTING CAAC TO ADOPT A MORE REASONABLE BARGAINING
POSITION. GEORGE EXPLAINED THAT VE, LIKE THE MEA, THOUGHT IT IMPORTANT THAT AGREEMENT SHOULD BE REACHED, AND WERE CONCERNED THAT THE NEGOTIATIONS APPEARED TO BE MOVING TOWARDS A DEAD-
LOCK. THE BRITISH SIDE HERE PREPARED TO MAKE CONCESSIONS, BUT IT WOULD NOT BE POSSIBLE TO RECOMMEND TO HMG AN AGREEMENT
AS UNBALANCED AS THAT OFFERED BY CAAC AT THE MOST RECENT
DISCUSSIONS. IT WAS DISTURBING THAT CAAC HAD IN THE PAST FEW
DAYS WITHDRAWN FROM UNDERSTANDINGS ON FUNDAMENTAL ISSUES WHICH
THEY HAD REACHED WITH US AT AN EARLIER STAGE.
2. GEORGE WENT OVER THE FOUR MAJOR POINTS ON WHICH CAAC VERE
MAINTAINING AN UNREASONABLE POSTION. (FREQUENCY ON THE TRUNK
TOUTE, TRATTIC RIGHTS FOR SA BETWEEN HONG KONG AND PEKING,
THE RIGHT TO SUSTITUTE ANOTHER BRITISH CARRIER FOR BA WHEN IT
STARTS TO "LY DIRECT, AND THE UNFAVOURABLE RATIO IN TERMS OF BOTH CAPACITY AND POINTS SERVED ON THE REGION)
3. AFTER APOLOGISING FOR THE FACT THAT VICE-VINISTER ZHANG
WENJIN WAS SO BUSY THAT IT HAD BEEN IMPOSSITLE FOR HIM TO COME TO A MEETING, WANG EXPLAINED THAT THE MEA WERE ALSO CONCERNED AT THE DIFFICULTIES IN THE NEGOTIATIONS BUT STILL HOPED FOR A
SNWCESSFUL CONCLUSION. BOTH SIDES NEEDED TO MAKE CONCESSIONS
AND WORK HARD FOR A SOLUTION. THE CAAC HAD THEIR OWN IDEAS:
THEY FELT THAT THE DEMANDS OF THE U SIDE WERE UNACCEPTABLY
HIGH.
THEY HAD SHOWN THEIR GOOD FAITH 1 SEEKING A SOLUTION BY DISCUSSING OUR PROPOSALS AND PUTTING FORVARS THEIR OWN.
/ BUT
CONFIDENTIAL
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