Mr Elliott
Mr Donald
SECRET
Hick 18411
Müsten
Lard Belstead has seen
6/5
(13
M
1
and
No
сче
in 16 Plans 1716
agreed
4
Teleg
задевать
FED to issue Buc when
rom A to issue
appropriate.
ма
ag A
PS/Lord Belstead
UK/CHINA AIR SERVICES
PROBLEM
1.
See
27
Whether to serve CAAC notice of termination of the Regional Confidential Memorandum of Understanding dealing with air-services between Hong Kong and China. Mr Donald has already minuted.
28
RECOMMENDATION
2.
Subject to confirmation that the Governor can accept our arguments, I recommend that (a) the Embassy in Peking should warn CAAC and the MFA that we are contemplating serving notice of termination, and (b) that unless the response of CAAC and the MFA within the next month gives us good reason to expect substantial progress at the next review of air services, we should duly serve one year's notice. HM Ambassador, Peking, the Department of Trade, MAED and HKGD agree. The Governor
of Hong Kong has reservations.
BACKGROUND
3. After long and difficult negotiations the UK/China Air Services Agreement was signed in 1979. At the same time we agreed to Confidential Memoranda of Understanding (CMU) dealing with trunk routes London-Peking and the regional routes Hong Kong-China, Implementation of the latter has been partial and acrimonious. A 'Hong Kong-based airline' was given rights to operate Hong Kong-Shanghai services as some balance to Civil Aviation Administration of China (CAAC) flights between Peking, Shanghai, any 4 other cities and Hong Kong. But CAAC refused designation to Cathay Pacific Airways (CPA) or a CPA subsidiary to operate the route when CPA secured London-Hong Kong rights, because the text of the CMU said that the service should be operated by a Hong Kong-based airline not also serving London, Later they agreed to allow CPA to operate the service on a temporary basis, on payment of a royalty and in exchange for CAAC rights from 3 more points in
China.
SECRET
/4.
No comments yet.
Private notes are available after approval.