TNAG-1259-FCO40-1599-The-Future-of-Hong-Kong---special-study-by-FCO--August-1982--1983 — Page 41

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6.

Because of Chinese susceptibility about sovereignty, the

ASA does not mention Hong Kong at all. Services between Hong

Kong and China are operated under a second Confidential Memorandum

of Understanding which extends the provisions of the ASA to such

services 'without prejudice to the position of either Government

with regard to the status of Hong Kong'. As a result of the

disadvantageous terms of this Confidential Memorandum of

Understanding CAAC now operate over 50 services a week from

Peking, Shanghai and 6 other Chinese cities whilst CPA have 3

services to Shanghai only. With well over 90% of passengers

to China originating in Hong Kong and enormous potential for

growth the Department of Trade are currently engaged on a very

difficult negotiation to improve CPA's share of this market,

as well as the economic viability of BA's service.

7. The Chinese attitude is also that since Hong Kong is

part of China, they do not acknowledge the UK's right to any

share of Hong Kong/China traffic but will concede a small share

grudgingly. Consistent with this they have questioned the UK's

right to a monopoly of the traffic on the London-Hong Kong

cabotage route, but they have not in practice contested it and

have not questioned our right to determine landing rights for

third countries at Hong Kong.

8.

Hong Kong's present airport (Kai Tak) is among the World's

top 20 for international traffic (8 million passengers per annum)

and with rapid growth taking place it is expected to reach

maximum capacity on its present site in Kowloon by about the

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