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НСК 18412
RECEIVED IN REGISTRY NO. 51.
27 AUG 1980
DSCK OFFICER
INDEX
GRS 68
REGISTRY
Action Taken
CONFIDENTIALAW
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CONFIDENTIAL
Pag21.8
TM RCO 261652Z AUGUST 1980
TO IMMEDIATE PEKING
TELEGRAM NUMBER 446 OF 26 AUGUST
INFO IMMEDIATE HONG KONG
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YOUR TELNOS 532 AND 533 AND HONG KONG TELNO 1057: HONG KONG-
CHINA AIR SERVICES
1.
SINCE CAAC HAVE NOT YET REPLIED ABOUT THE ACCEPTABILITY
OF HONG KONG AIRWAYS, WE THINK IT WOULD BE COUNTER-PRODUCTIVE
TO REFUSE EXTENSION OF CAAC'S CANTON PERMIT. WHEN YOU SEE LU
ON 28 AUGUST YOU MAY THEREFORE INFORM HIM, WITHOUT COMMENT, THAT
THE PERMIT IS EXTENDED TO 30 SEPTEMBER. DOT WILL INFORM CHINESE EMBASSY HERE ON SAME DAY, IN RESPONSE TO INQUIRY WHICH THEY HAVE
MADE.
2.
PARA 3 OF SECOND TUR: WE AGREE THAT YOU SHOULD FOLLOW
THE LINE PROPOSED.
3.
IF CAAC REPLY ABOUT ACCEPTABILITY OF HKA IS NEGATIVE,
WE SEE SOME MERIT IN REFUSING AN EXTENSION OF THE CANTON PERMIT,
AT LEAST BEYOND 30 SEPTEMBER OR SHORTLY THEREAFTER BEARING IN
MIND MY VISIT IN OCTOBER. WE APPRECIATE THE ARGUMENTS IN
PARAGRAPH 1 OF HONG KONG TUR, BUT TERMINATION OF THE SERVICE WOULD SURELY BE A COMMERCIAL BLOW TO CAAC, WHO ARE NOW PERMITTED
TO OPERATE 3 FLIGHTS A DAY. WE HAVE LITTLE ENOUGH LEVERAGE
AND IF OUR INTERPRETATION OF THE VALUE OF THE SERVICE TO CAAC
IS CORRECT IT MIGHT NOT BE TO OUR LONGER TERM ADVANTAGE TO
WITHHOLD THIS CARD. IF WE DO NOT PLAY IT THE ONLY WAY OF
SECURING A RESUMPTION OF THE HONG KONG-SHANGHAI SERVICE WOULD
SEEM TO BE NEW CONCESSIONS ON OUR PART. WE FIRMLY BELIEVE WE
SHOULD NOT MAKE THESE. FURTHERMORE, RESUMPTION OF THE HONG KONG- SHANGHAI SERVICE TO OUR SATISFACTION WOULD CLEAR THE WAY FOR CAAC
SERVICES FROM OTHER PRC CITIES TO HONG KONG TO COMMENCE.
4.
WE THINK IT WOULD BE HELPFUL THEREFORE TO GIVE FURTHER
THOUGHT TO THE QUESTION WHETHER THE RISK OF COUNTER-ACTION BY THE
CHINESE AGAINST HONG KONG'S GATEWAY FUNCTION AND POSSIBLY AGAINST
Neyil.
1
CONFIDENTIAL
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