846G.79693/4–548: Telegram

The Ambassador in China (Stuart) to the Secretary of State

608. Merchant discussed Hong Kong–Shanghai air traffic impasse April 3 with Minister of Communications. Latter made eloquent plea [Page 797] for US denunciation on ground not of China’s legal case but as “friendly act” in matter of vital importance to Chinese aviation development. Minister did refer to Chinese negotiators’ reliance on alleged assurance from Powell of US disinterest in such traffic which they apparently now interpret retroactively as undertaking amounting to US voluntary self-denial such Fifth Freedom traffic. Minister raised possibility Chinese denunciation Air Transport Agreement.

Importance maintaining integrity Fifth Freedom principle everywhere stressed by Embassy and Minister urged to restudy actual traffic figures as demonstration his fears ungrounded on facts.

Embassy recommends US stand firm. Denunciation by China still believed remote but possibility somewhat enhanced. Minister’s reliance on legalisms would appear to remove chance of appeal to ICAO by China under disputes article.

Sent Department 608; repeated Shanghai 237.