February 10, 1992


EMBASSY OF THE UNITED STATES OF AMERICA
February 10, 1992

Excellency :
I have the honor to refer to the October 1990
bilateral civil aviation negotiations conducted
between representatives of the Government of the
United States of America and the Government of the
People's Republic of China . In light of the
understandings reached at those negotiations, I have
the honor to propose that the 1980 Agreement between
the Government of the United States of America and
tie Government of the People's Republic of China
Relating to Civil Air Transport with annexes and
exchanges )f Ie tters, as amended, (hereinafter
referred to as the "Agreement") be further amended as
described below .
of Foreign Affairs of
The People's Republic of China .

His Excellency
Tian Zengpei,
Vice Minister

1 . ROUTE RIGHTS
Annex I of the Agreement shall be replaced by
a revised Annex I which is appended to this note as
Attachment I .

2 . CAPACITY ARRANGEMENT

Annex V of the Agreement shall be replaced by
a revised Annex V which is appended to this note as
Attachment II .

3 . DESIGNATIONS
Paragraph (i) of Article 3 of the Agr.eernen :
relating to designation shall be replaced by the
following :
"(1) Each party shall have the right to
designate in writing through diplomatic
channels to the other party, three (3)
airlines to operate the agreed services on the
specified routes, and to withdraw or alter
such designations . One airline may be

4. AVIATION SECURITY
designated for each of the three routes set
forth in Annex I of this Agreement . The same
or a different airline may be designated for
each route . The airline(s) designated for
routes 1 and 2 may operate combination or
all-cargo services or both . An airline
designated for the third route described in
Section III of Annex I may operate all-cargo
service only ."
Article 8 of tho Agreement re Iatinq to
"Aviation Security" shall he replaced b the
following :

ARITICLE 8
AVIATION SECURITY
(1) In accordance with their rights and
obligations under international law, the
parties reaffirm that their obligation to
protect, in their mutual relationship, the
security of civil aviation against acts of
unlawful interference forms an integral part
of the Agreement .

(2) The parties shall provide upon request
all necessary assistance to each other to
prevent acts of unlawful seizure of aircraft
and other unlawful acts against the safety of
passengers, crew, aircraft, airports and air
navigation facilities and any other threat to
aviation security .

(3)The parties shall act in full.
conformity with the provisions of the
Convention on offenses and Certain Other Acts
Committed on Board Aircraft, signed at Tokyo
on 14 September 1963, the convention for the
Suppression of Unlawful Seizure of Aircraft,
signed at The Hague on 16 December 1970, and
the Convention for the Suppression of Unlawful
Acts Against. the Safety of civil Aviation,
signed at Montreal on 23 September 1971, to
the extent that these provisions ace ratified
by the parties .

(4) The parties shall, in their mutual
relations, act in conformity with the Aviation
Security Standards (except to the extent to
which a party has filed a difference thereto
in accordance with the Convention on
International Civil Aviation) and, so far as
they are applied by them, the recommended
practices established by the International
Civil Aviation Organization and designated as
annexes to the Convention on International
civil Aviation ; and shall require that
operators of aircraft of their registry,
operators who have their principal place of
business or permanent residence in their
territory, an(] operators of airports in their
territory, act_ in conformity with such
aviation security previsions .

(5) Each party agrees to observe the
security provisions required by the other
party for entry into the territory of that
other party and to take adequate measures to
protect aircraft prior to and during boarding
or loading and to inspect passengers, crew,
their carry-on items as well as cargo and
aircraft stores prior to boarding or loading .
Each party shall also give positive
consideration to any request Erom the other
party for special security measures to meet a
particular threat .
believe that the other party has departed
the aviation

(6) When an incident or threat of an
incident of unlawful seizure of aircraft or
other unlawful acts against the safety of
passengers, crew, aircraft, airports and other
navigation facilities occurs, the parties
shall assist - each other by facilitating
communications and other appropriate measures
intended to terminate rapidly and safely such
incident or threat thereof .

(7) When a party has reasonahle grounds to
security provisions of this
from article, the aeronautical authorities of that
party may request. immediate consultations with
aeronautical authorities of the other party .
Failure to reach a satisfactory agreement
within 1 .5 days from the date of such request,
or an urgent threat to the security of
international civil aviation, will constitute
grounds for application of Article 4 of the
Agreement ."

COOPERATIVE SERVICEARRANGEMENTS
Article 11 of the Agreement relating to
"Market Access" shall he amended to add the following
paragraph (5) :

(5) The parties agree to approve
cooperative service arrangements negotiated on
reasonable commercial terms between their
airlines . The types of arrangements that will
he approved include wet leases, blocked space
arrangements and code-sharing . However,
approvals will not be granted for arrangements
involving the carriage of.'cabotage traffic_,
pooling or revenue-sharing arrangements ."
I have the further honor to propose that if
the foregoing proposal is acceptable to your
government, this note with its attachments and your
Excellency's note in reply indicating such acceptance
shall constitute an agreement between our two
governments, which shall enter into force on the date
of your Excellency's note. . Upon entry into force,
this Agreement shall supersede the protocol amending
the Agreement, signed at Beijing August 19, 1982 .
Accept, Excellency, the renewed assurances of
my highest consideration .

ATTACHMENT I
ANNEX I 1/, 2/, 3/

I . FIRST ROUTE

A . For the United States of America :
One airline designated by the flnited
States of America shall he entitled to operate
the agreed services with full traffic rights
on the following route, in hoth directions :
New York, Chicago, San Francisco, Los
Angeles, Honolulu, Tokyo or another
point in Japan, Shanghai, Guangzhou,
Beijing .

B . For the People's Republic of China :
One airline designated by the People's
Republic of China shall be entitled to operate
the agreed services with full traffic rights
on the following route, in both directions :
Beijing, Guangzhou, Shanghai, Tokyo or
another point in Japan, Honolulu, Los
Angeles, San Francisco, Chicago, New

II . SECOND ROUTE
York .
4/ Anchorage, Fairbanks, and/or
a point in Japan other than Tokyo and
Osaka may be used as technical stops in
both directions on this route .

A . For the United States of America :
A second airline designated by the
united States of America shall he entitled to
operate the agreed services with full traffic
rights on the following route, in both
directions :
Chicago, San Francisco, Los Angeles,
Seattle or Honolulu, Tokyo or another
point in Japan, Shanghai, Guangzhou,
Beijing .

B . For the People's Republic of China :
A second airline designated by the
People's Republic of China shall he entitled
to operate the agreed services with full
traffic rights on the following route, in both
directions :
Beijing, Guangzhou, Shanghai, Tokyo or
another point in Japan, Honolulu or
Seattle, Los Angeles, San Francisco,
Chicago .
4/ Anchorage, Fairbanks,
and/or a point in Japan other than
Tokyo and Osaka [nay he used as
technical stops in both directions on
this route .

ALL-CARGO ROUTE
A . For the United States of America :
A third airline designated by the
United States of America shall be entitled to
operate all-cargo services with full traffic
rights from any point or points in the United
States, via any intermediate points to any
point or points in the People's Republic of
China open to scheduled international
operations, and beyond to any points outside
the People's Republic of China . Absent the
designation of a third carrier, the United
States of America may grant permission to one
of the U .S . airlines designated on the first.
or second route to operate all-cargo services
on this route .

8 .For the People's Republic of China :
A third airline designated by the
People's Republic of China shall he entitled
to operate al.l-cargo services with full
traffic rights from any point or points in the
People's Republic of China, via any

IV . EXTRA SECTION

intermediate points to any point or points in
the United States open to scheduled
international operations, and beyond to any
points outside the United States . Absent the
designation of a third carrier, the People's
Republic of China may grant permission to one
of the Chinese airlines designated on the
first or second route to operate all-cargo
services on this route .
In case any of the designated airline(s) of
either party desires to operate additional sections
on its specified route(s), it shall submit
application to the aeronautical authorities of the
other party three (3) days in advance of such
operation, and the additional sections can he
commenced only after approvals have been obtained
therefrom .

TRAFFIC RIGHTS INJAPAN/STOPOVER RIGHTS IN THE
UNITED STAPES 5/ AND 6/

A . For the United States of America :
The U .S . designated airlines shall he
allowed to enjoy traffic rights in Japan on
all services .

B . For the People's Republic of China :
(1) The Chinese designated airlines
shall he allowed to enjoy traffic
rights in Japan on all services .
(2) In case it is not possible for any
of the Chinese designated airlines to
fully exercise traffic rights in Japan,
the following provisions shall apply :
(A) Subject to the limits
specified in paragraph (B) below,
the designated airlines of China
shall be entitled to enjoy full
stopover rights at all United
States points on the specified
routes in respect of all
international stopover traffic
not involving carriage of
cabotage traffic .
(B)
If a Chinese designated
airline operates any frequencies
with traffic' rights through Tokyo
or a point service, the number of
Frequencies entitled to stopover
rights by the said airline shall
ho reduced by the same number .
If any U .S . designated airline
operates any ii .S .-China non-stop
frequencies, the stopover rights
of the Chinese designated airline
operating on that route shall he
reduced by the same number of
frequencies .

1/ Each designated airline may at its option omit
any point or points on the above routes on any
or all flights in either or both directions,
provided, however, that the agreed service it
operates begins or terminates at a point on
the specified route in the territory of the
party designating the airline .

2/ Before operation of service through another
point in Japan, referred to in Sections I and
II of this Annex, that point shall he agreed
upon by the parties .
If a designated airline
of either party desires to change the point
served in Japan, the aeronautical authorities
of the party designating the said airline
shall furnish six (6) months' notice to the
aeronauticall authorities of the other party .
Such change shall he subject to the
concurrence of that other party .
Subject to the provisions of Annex V, the
designated airline(s) of each party may make a
change of gauge in the territory of the other
party or at an intermediate point or points on
the specified route(s) provided that :

(A) Operation beyond the point of
change of gauge shall be performed by
an aircraft having capacity less, for
outbound services, or more, for inbound
services, than that of the arriving
aircraft .

(9) Aircraft for such operation shall
be scheduled in coincidence with the
outbound or inbound aircraft, as the
case may he, and may have the same
flight number ; and

(C) If a flight is delayed by
operational or mechanical problems, the
onward flight may operate without
regard to the conditions in
subparagraph (B) of this paragraph .

4/ The People's Republic of China may add a total
of two intermediate or beyond points of its
own choosing to its routes . These two points
may be served with full traffic rights and may
be added to a single route or allocated at the
discretion of China between routes 1 and 2 .
5/ The parties agree that the letters exchanged
on September 8, 1980, between Mr . Lin Zheng
and Mr . B . Boyd Hight relating to Japan
traffic rights are hereby superseded .
The People's Republic of China shall he entitled
to select point services equal to the
difference between the number of Japan
frequencies operated by the U .S . designated
airline(s) and the number of Japan frequencies
authorized for the Chinese designated
airline(s) .
The term "point service" means
one weekly frequency with full traffic rights
at a point .
The Chinese designated airline(s)
shall be entitled to operate such point
services at one or more intermediate and/or
beyond points at the sole discretion of the
People's Republic of China . A list of
intermediate and/or beyond points so selected
shall be furnished to the Government of the
United States through diplomatic channels not
later than 60 days prior to the commencement
of operation . The number of point services
operated by the Chinese designated airline(s)
shall be reduced by one for each new Japan
frequency which the Chinese designated
airline(s) is authorized to operate subsequent
to the selection of point services .
6/ For the purpose of this section, the term
"stopover rights" shall mean the right for
designated airlines of China to unload the
traffic carried on the agreed services at one
point in the territory of the other party and
thereafter load such traffic on the agreed
services for onward carriage to any point on
the specified route .

ANNEX V
CAPACITY AND CARRIAGE OF TRAFFIC

(1) The parties agree that during 1991 to 1996,
each party may operate the number of weekly
frequencies provided for in the provisions below . A
party may allocate to its designated airlines the
frequencies provided by this section as it wishes .

(A) Phase 1
(1991-1992) - Designated
airlines of each party may operate in total up
to eighteen weekly roundtrip frequencies .
During Phase 1, of the eighteen available
weekly frequencies, no
more than fourteen may
be used for combination services, and no more
than four weekly roundtrip frequencies may be
operated on the all-cargo route described in
Annex I, Section III .

(B) Phase 2
(1993-1994) - Designated
airlines of each party may operate in total an
additional two weekly roundtrip frequencies .
During Phase 2, of the twenty available weekly
frequencies, there shall be no limitation on
the number of frequencies that may be used for
combination service, and no more than six
roundtrip frequencies may be operated on the
all-cargo route described in Annex I, Section
III .

(C) Phase 3
(1995-1996) - Designated
airlines of each party may operate in total an
additional seven weekly roundtrip
frequencies .
During Phase 3, of the
twenty-seven available weekly frequencies,
there shall be no limitation on the number of
frequencies that may be used for combination
or all-cargo service . The parties will
discuss before the end of 1995, and will
endeavor to conclude before the end of 1996, a
capacity arrangement to meet increased market
needs beyond 1996 . After 1996, in no event
shall the number of authorized weekly
frequencies he decreased below Phase 3 levels .

(2) In consideration of paragraph 1 of this annex,
relating to capacity arrangements, the right to bank
unused frequencies shall be immediately terminated
and previously banked frequencies shall be eliminated .

(3) With a view to realizing the objectives set
forth in Article 12, paragraph (2) of this Agreement,
the parties agree that there should be a reasonable
balance of the traffic carried by their respective
designated airline(s) on the specified route(s), in
terms of number of passengers and tons of cargo takes .
up and put down in the territory of the other party .
The consultations referred to in Article 12,
paragraph 6, shall take place as soon as possible,
and in no event later than thirty (W days following
the date of receipt of the request by the latter
party . The parties shall undertake to reach
agreement within thirty (30) days as to effective
measures for remedying the imbalanced situation and
fully implement such agreed measures . In considering
the measures to be undertaken, the parties shall take
into account all relevant factors, including
commercial decisions of the designated airlines, load
factors and actions of third parties . In case the
agreed measures fail to remedy the imbalance within
three months after their implementation, the parties
shall meet together to look into the cause of such
failure and agree upon measures for remedying the
imbalance situation . In case the parties fail to
reach agreement on effective remedial measures, they
shall look into the cause of the imbalance and
consider amendments to this agreement which may be
required to eliminate such cause .

(4) The provision of paragraph (3) of this Annex
is valid for three years from the date of
commencement of any service under this agreement, as
amended . Not later than six months prior to the end
of this three-year period, the parties shall consult
with a view to agreeing to the means to achieve
reasonable balance of traffic referred to in
paragraph (3) of this Annex .
H .E . Stapleton Roy
Ambassador Extraordinary and Plenipotentiary
of the United States of America
to the People's Republic of China
Excellency :
I have the honor to acknowledge receipt of your note of
February 10, 1992, which reads as follows :
[The Chinese translation of the United States Embassy
note dated February 10, 1992, is identical in all
substantive respects to the English text .]
I have the honor to confirm acceptance of your Excellency's
note, on behalf of the People's Republic of China, and to
confirm that your Excellency's note and this reply shall
constitute an agreement between our two governments which shall
enter into force on the date of this reply .
[Complimentary close]
Tian Zengpei
Vice Minister of Foreign Affaire of
The People's Republic of China
Beijing
February 10, 1992
the bozo: Of my