TNAG-1176-FCO40-1478-Air-services-between-the-UK--China-and-Hong-Kong-1982 — Page 37

SECRET (Note: This classification is needed for the safe

handling of this telegram in Hong Kong.)

IMMEDIATE

HONG KONG

COPY PEKING

UK/PRC AIR SERVICES

with

the

1 At the forthcoming Air Services negotiations Chinese, we will be seeking a full review of the 1979 arrange- ments. but in practice the talks will probably tend to focus on arrangements to apply for the summer of 1983 with particular reference to Shanghai and Peking. Although there will probably

be

ઈં second round in Peking in Maron. we need to have clear

objectives from the outset.

2 Department of Trade still consider' that the best and possibly the only means of obtaining permanent rights for CPA to serve Shanghai and

and a a fortiori Peking is to threaten notice

notice of withdrawal from the regional CMU at December talks, be prepared to carry out that threat when talks are resumed as we must expect in March and in the last resort be prepared to see all regional services cease at the end of March 1984 unless the Chinese come

to terms as Department of Trade believe they would. March is the best time to put pressure on CAAC because the summer season is so

profitable for them.

3 If you still do not agree that We should be prepared to accept the degree of confrontation which this course implies, CPA will have to rest content with a one-third share of whatever we can agree to be the Hong Kong/Shanghai market for 1983. and there can be little or no hope of obtaining for CPA any access to Hang Kong/Peking traffic. As Mr Sproat told you in July. we are not propared to push BA off the Hong Kong Puteing to Peking which is the only economic option they have unless by so doing we sure to gain access for CPA.

can be

1