TNAG-2537-FCO40-3708-Air-services-agreement-between-Hong-Kong-and-China-1992 — Page 27

C X/TAIWAN AIR LINKS

10.

We are actively pursuing proposals for air services between

the UK and Taiwan. In the absence of diplomatic relations, much

of the running has had to be made by the UK airline planning to

operate the service,

service, British

British Airways who are in commercial

negotiation with Taiwanese airlines. We have avoided official contact with the Taiwanese authorities but have held two Working

Groups in Peking with the Chinese on this subject in response to their high level protests about the proposed services. We do not accept Chinese claims that their approval is needed for BA to start a Taiwan service, but hope to secure their acquiescence to

avoid possible damage to BA and perhaps other UK interests in

China. The Chinese have moved from blanket objection to the

service to accepting that a UK and a Taiwan carrier should operate, provided both are privately owned.

11. A third Working Group is to take place in late July and we

will be using that to explain to the Chinese that BA is planning

to use

a London-Hong Kong-Taipei routeing. The Chinese have already been warned of this (they were told when recently BA

filed for airport slots at Hong Kong and Taipei from November 1992) and, unsurprisingly, made negative noises. However, this is the only viable route for BA in the short term and would exercise existing rights granted by Hong Kong under our bilateral arrangements (see below). The Taiwanese airline reciprocating the service would not be given permission by us to operate via Hong Kong, nor have they sought to do so, so if that is the prime Chinese sensitivity we can give them suitable assurances.

12. HKG is aware of the above proposal, although the commercial details have been protected, and will be kept informed of our progress with the Chinese.

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