TNAG-0941-FCO40-1160-Visit-by-Lord-Carrington--Secretary-of-State-for-Foreign-and-1980 — Page 105

- 3 CONFIDENTIAL

few senior officials. The Executive Council (which includes nine

Unofficial Members) will need to be consulted in due course but the

time for that has not yet come. It would therefore be best if the

Secretary of State went no further than the line suggested in the

Points to Make in responding to any questions on this subject.

VIETNAMESE REFUGEES

11. On 10 September, there were still 37,263 Vietnamese refugees in

Hong Kong. The rate of offtake from Hong Kong is the slowest for all

countries of first asylum in the region, due largely to Hong Kong's

humanitarian policy, which compares very favourably with its South-

East Asian neighbours. As a result, many resettlement countries give

priority to refugees from elsewhere in the region. Although we should

have fulfilled our commitment to accept 10,000 refugees for permanent

settlement in the UK before the end of the financial year, there

remains pressure in Hong Kong for HMG to do more, preferably by extend-

ing the quota. It would be premature for the Secretary of State to

give any indication of Ministers' attitudes towards a further quota.

REGIONAL AIR SERVICES

12. The Sino-British Air Services Agreement signed in November 1979

provided for one designated British airline to operate the trunk route

from the UK to China. British Airways was the airline designated.

Regional links between Hong Kong and Chinese cities were also planned.

Accordingly, Cathay Pacific (the Hong Kong based airline) were granted

an operating permit for the Hong Kong/Shanghai route and began services

on 21 June.

13.

However, the Civil Aviation Authority of China suspended the

Hong Kong/Shanghai services on 16 August. The CAAC argues that the

permit granted to Cathay Pacific to fly London/Hong Kong in effect

enables Cathay to operate a London/Shanghai trunk route service, and

that this contravenes the Air Services Agreement.

14.

HMG reject this view and have made a proposal under which a partly

CONFIDENTIAL

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