TNAG-1176-FCO40-1478-Air-services-between-the-UK--China-and-Hong-Kong-1982 — Page 113

CONFIDENTIAL

Thus wen

Kurman of the train.

this manoeuvre while BA would certainly lose by having to use

an uneconomic routeing. There would be no point in pressing

be so

for a meeting before September/October and we should not

expect to make any progress unless and until CAAC want

additional rights to and through Hong Kong e.g. across the

Pacific or to other points in S E Asia. This may be some

years ahead and by then the value of their position on

services between Hong Kong and points in China could

great that they would not be prepared to jeopardise the

status quo in order to obtain such rights anyway.

Indeed this could already explain why Lu did not pursue

CAAC's earlier interest in such rights at the review

negotiations last March.

Of the two ways to make some impression on CAAC we should be

on stronger and less controversial ground in giving notice of

termination of the CMU than in attempting to curtail the

Tianjin and Nanjing services. It is not particularly unusual

or necessarily provocative to terminate such understandings

when they no longer meet our circumstances although it would

be foolish to suppose that the negotiations to replace it

would be other than keenly fought on both sides. Strong nerves

would be needed at the end, but having seen the arguments

set out in paragraph 1 of your TUR and paragraph 3 of Peking

Tel No 330 it remains our view that a renegotiation of the

regional CMU need not have adverse consequences for relations