TNAG-1063-FCO40-1313-Air-services-between-the-UK--China-and-Hong-Kong-(including--1981 — Page 23

which u have not yet made to CAAC).

You could

also express concern that CAAC's attitude could

lead to an escalating spiral of reciprocal action

which it would be in the interest of both sides to

avoid.

we

3. We do not think the time is ripe to issue a

specific threat (eg on the Nanjing Services):

may well need to employ such drastic measures in the

context of next year's review, but Hong Kong are

still considering how far we can go in that

direction and we would therefore much prefer at

present not to be drawn progressively by a chain of

threats and counterthreats into using our heaviest

hammer in order to crack the present relatively

small nut.

1

1

1

NOTHING TO BE WRITTEN IN THIS MARGIN