TNAG-1176-FCO40-1478-Air-services-between-the-UK--China-and-Hong-Kong-1982 — Page 10

SECRET

HONG KONG GOVERNOR

COPY PEKING

UK/PRC AIR SERVICES

Our assessment of the situation following talks with the Chinese recorded in FCO Telegram 514 to Peking is as follows:-

}

(i) We are no nearer to getting Cathay's designation for

services to Shanghai and eventually other points in

China accepted. Nor can we expect to achieve formal

designation so long as we are trying to negotiate within

the framework of the 1979 arrangements which specifically

exclude an airline which also operates services to London.

CPA now have an opportunity to explore with CAAC what

arrangements might be acceptable for a Hong Kong based

airline to operate services between Hong Kong and Peking

but the chances of reaching agreement at an acceptable

price do not look good, especia

(ii)

(iii)

H

Lu made it clear that even if BA's service was not routed

via Hong Kong he would still regard services to Peking by

a Hong Kong based airline as constituting a second trunk

route to London.

We remain concerned that failure to resolve the Tianjin

issue before the 1983 summer operating season will

permanently undermine our ability to obtain reciprocal

Hong Kong/Peking services for any UK airline.

2

In preparation for the next round of negotiations, and

particularly if we have to assume that all more forceful means of

persuasion are still ruled out, it will be important to use every

opportunity that presents itself to bring diplomatic pressure to