TNAG-0868-FCO40-1078-Air-services-between-China--Hong-Kong-and-the-UK-1979 — Page 99

166

GR 820

CONFIDENTIAL

CONFIDENTIAL

FM PEKING 130824Z JUNE 79

TO IMMEDIATE FCO

TELECRAM NUMBER 553 OF 13 JUNE 79

AND TO IMMEDIATE HONG KONG

K184/2

RECEIVED IN FINGHY NO.

15.IN 1979

DESK OFík ř INDEX

PA

DA.

51

MIPT:

AIR SERVİCE NEGOTIATIONS.

ما

281

167

180

IS ALMOST CERTAINLY THE

'S ALMOST CERTAINLY THE see (166)

1. OPTION A AS RECOMMENDED IN MIPT

BEST DEAL WE CAN EXPECT THE CHINESE TO AGREE. AFTER REACHING

A POSITION WHERE A DEAL SEEMED TO TE IN SIGHT ON 29 MAY (MY TELNO 499), OUR EFFORTS TO EXTRACT FURTHER CONCESSIONS ONLY HARDENED

THE CHINESE LINE. AS A RESULT OF OGERS'S EFFORTS AND A

FURTHER DIPLOMATIC APPROACH WE ARE NOW ALMOST BACK AT THE 29 MAY

POSITION, BUT WE CANNOT GET FURTHER. HOWEVER MUCH THE CHINESE

MAY WANT A DEAL ON GENERAL POLITICAL GROUNDS THEY ARE NOT

PREPARED TO PAY OUR PRICE.

2. THE QUESTION NOW IS WHETHER WE SHOULD ACCEPT A COMPREHENSIVE BUT UNBALANCED AGREEMENT ON THE BEST AVAILABLE TERMS (OPTION A), GO FOR A PARTIAL AGREEMENT (OPTIONS B OR C), OR BREAK OFF THE NEGOTIATIONS (OPTION D). 1 SHOULD SEE SOME MERIT IN A PARTIAL

AGREEMENT OR AN ADJOURNMENT IF WE WERE LIKELY TO BE IN A BETTER

BARGAINING POSITION A FEW MONTHS OR A FEW YEARS FROM NOW, BUT

I CANNOT SEE HOW THIS SHOULD BE. CAAC ARE ALREADY OPERATING OR

ALLOWING OTHERS TO OPERATE MORE SERVICES BETWEEN PEKING AND

EUROPE THAN CHINA TRAVEL SERVICE CAN COPE WITH: NEW AGREEMENTS

AND PROSPECTIVE SERVICES TO FURTHER POINTS (FRANKFURT, AMSTERDAM, COPENHAGEN) SUGGEST THAT AFTER A FEW YEARS THE CHINESE DESIRE TO OPERATE TO LONDON WILL WANE RATHER THAN INCREASE. PER CONTRA, WITH HUA'S VISIT COMING UP, THE POLITICAL CLIMATE IS NOW SPECIALLY PROPITIOUS.

3.

LEAVING ASIDE THE QUESTION OF VIABILITY FOR BA, THE DIFFICULTY WITH OPTIONS AND C 13 THAT THEY PROVIDE FOR NO SERVICES BETWEEN HONG KONG AND PEKING OR SHANGHAI, LET ALONE GETTING A BRITISH CARRIER ON TO THESE ROUTES. 11OREOVER THE CHINESE ARE NOT

AT ALL WORRIED ABOUT AN ABSENCE OF SCHEDULED SERVICES BETWEEN

168

1724

(173A)

ANTIAL

HONG KONG