TNAG-1176-FCO40-1478-Air-services-between-the-UK--China-and-Hong-Kong-1982 — Page 50

SECRET (Note:

1 SDIATE

PONG KONG

COPY PEKING

is cleanification is needed for the safe handling of this telegrum in Hong Kong.

UK/PRC AIR SERVICES

At the forthcoming Air Services negotiations with the Chinese we will be seeking a full review of the 1979 arrangements, 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 a second

round in Peking in March we need to have clear objectives from

the outset.

Department of Trade still consider that the best and possibly the

only means of obtaining permanent rights for CPA to serve

Shanghai and a fortiori Peking is to threaten 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 DOT believe they would. March is the best time to put

pressure on CAAC because the summer season is so profitable for

them.

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If you are still not 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 Hong Kong/Peking traffic. As Mr Sproat