GPG 580
CONFIDENTIAL
S/BY FCO 1714Z
MMM PEKING 171215Z JUL 79
TO IMMEDIATE FCO
CONFIDENTIAL
TELEGRAM NUMBER 645 OF 17 JULY. 79
INFO IMMEDIATE HONG KONG
FOLLOWING FROM DELEGATION
Акк 1844
210
RELATED IN REMAP NO. 51
18 JUL 1979
MY TELNO 639: UK/PRC AIR SERVICES NEGOTIATIONS
PA
1. IN THE COURSE OF A TETE A TETE ON 17 JULY ROGERS AND LU DISCUSSED AT LENGTH THE OUTSTANDING ISSUES AND THE PROPOSALS FOR RESOLVING THEM WHICH ROGERS HAD HANDED OVER ON 19 JULY (MY TEL NO 633).
2. LU SAID THAT QUOTE THE CHINESE GOVERNMENT UNQUOTE BELIEVED THEY HAD ALREADY GONE AS FAR AS THEY COULD TO MEET US AND THAT THERE WAS VIRTUALLY NO ROOM FOR FURTHER MOVEVENT ON THEIR SIDE. THEY WOULD THEREFORE EXPECT US TO CONCEDE TO THEM NEARLY ALL THE SUBSIDIARY POINTS STILL AT ISSUE. (HOWEVER, ALL THESE LIE WITHIN THE AMBIT OF YOUR PREVIOUS INSTRUCTIONS,)
3. AS REGARDS THE QUESTION OF THE SAME BRITISH CARRIER OPERATING BOTH BETWEEN HONG KONG AND LONDON AND BETWEEN HONG KONG AND POINTS IN THE PRC, LU SAID HE WAS NOT CONTENT WITH THE FORMULA IN PARA 3 OF MY TELNO 629: BUT HE INDICATED
A WILLINGNESS TO ACCEPT AN ASSURANCE ON THE LINES OF ALTERNATIVE B IN PARA 1 OF YOUR TELNO 399. ROGERS DID NOT THEREFORE BRING ALTERNATIVE A INTO PLAY. LU SAID, HOWEVER, THAT HE WISHED TO REFLECT OVERNIGHT BEFORE CONFIRMING THAT THERE WOULD BE MO CBJCTION IF THE BRITISH AIRLINE OPERATING THE REGIONAL ROUTES WERE A WHOLLY OWNED SUBSIDIARY OF THE AIRLINE OPERATING BETWEEN HONG KONG AND LONDON.
4m THE GATWICK PROBLEM THEN. EMERGED AS THE QUOTE MAKE OR BREAK UNQUOTE ISSUE. LU REPEATED HIS INSISTENCE ON AN ASSURANCE THAT CAAC COULD CHOOSE TO OPERATE TO HEATHROW IF THEY WISHED (PARA 2 OF MY TELNO 629). ROGERS PRESSED HIM VERY HARD, ARGUING THAT IF (AS SEEMED LIKELY) CAAC THEMSELVES OPTED FOR GATWIC. THERE
CONFIDENTIAL
/WOULD BE
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