Snippets from the South China Morning Post... what CX gets and what the mainland China airlines get:

Hong Kong and Beijing signed a landmark aviation deal yesterday that will raise the number of airlines allowed to serve the mainland and ultimately add 400 flights a week to meet the growing demand for leisure and business travel.

The deal allows Cathay Pacific to apply immediately for more flights to Beijing and for cargo services to Shanghai. It will be allowed to fly passengers between Hong Kong and Shanghai in 2006.

Mainland airlines will face greater competition, but will be able to fly to more onward destinations from Hong Kong.

So Shanghai passenger services are out of the picture for a couple more years it seems...

Maybe the Swine, uh Swire group should divest a huge portion of its remaining interest in CX and/or give up management control to H.K. if not Chinese interests.

Interesting viewpoint - so the fact that Swire Pacific is a HK based company, and has been so for all it's history, it doesn't count as a HK interest? Well, I guess Victor Li is now interested in aviation so could take over - having tried to buy Air Canada - but then again, he is Canadian, so guess they aren't HK interests. Plus his father was born in Shantou, which isn't HK either...

Last time I checked, Swire (UK) stakeholding in Cathay was effectively 13%. This is a lower foreign shareholding than exists in MU or CZ, which allow up to 35% foreign shareholding.

You seem to hjave forgotten history and how all the "hongs" got their start in China and H.K. (or how H.K. came about in the first place). The Chinese have long memories and the past of these companies such as Jardine Matheson and Swire will never be forgotten by the Chinese leadership (of any political stripe, I wager). That's why K.S. Li's takeover of Hutchison Whampoa was greeted so well by the PRC.

What matters is that he is Chinese and his family is known and friendly with the PRC (so much so that some in the Canadian "intelligence" service are worried about his father's empire in shipping and ports worldwide). Correct me if I am wrong but there's no evidence V. Li ever gave up his H.K. residency/BNOC or whatever it was he had. I doubt if the Swires have ever had any interest in living in H.K. from cradle to grave.

You could argue that SQ shareholding in VS is 49% but that appears to give SQ zippo influence at VS.

Swire still indirectly and directly controls the companies that own CX. It's not a matter ownership but a matter of control, and Swire just happens to control CX. Until Swire relinquishes control, and surrenders management to locals (H.K. or mainland), it'll still be seen as foreign company and will thus be hobbled.

Swire started in Asia in 1867, so a generation after the shameful start of HK. Hopefully the Chinese have long enough memories and enough understanding of history to realise that...

Interestingly started at about same time as HSBC, with whom PRC seems to have no issue controlling HK banking system, or entering the mainland, despite their gweilo management

Personally, I think it is just commercial protectionism and lobbying by MU/CA/CZ etc, rather than some deep rooted racial revenge. Note that MU have been just as keen to stop Shanghai Airlines flying to HK as stopping CX flying the route, and that is certainly an airline run by Chinese.

And as an aside - you'll also note that MU/CA don't have PRC-Macau rights. No doubt also because of their foreign ownership and the long memories of the Chinese of the evils done to them by other Chinese...

well.. HSBC = Hong Kong and Shanghai Banking Coorporation.. the name itself explain why it can be accepted to China as oppose to Cathay..

thats just my 0.00001 cents.. haha

hm.. actually.. i remember reading a book that said Cathay actually is the ancient name of China and Pacific actually means the desire of the airline to fly across the pacfic when it was first start up in the 1940s or 1950s (can't remember)

Name and long-past history doens't matter. Don't forget that Li Ka Shing hasn't given up the name of Hutchison Whampoa after his Cheung Kong bought it. And both Hutchison and Whampoa, as well as Watson's, all have long colonial histories - much longer than Cathay Pacific's. All those names are still in use by Li's group extensively.

More recent history is another matter, of course.

Also notice that the colonial government, at least in its final 20 or so years when I was growing up in HK, never let itself to favor any "hong" tycoons at least in the public eye, as the current HK/Beijing leaders are shamelessly doing with the Li family. (e.g. the Cyberport project) I seldom saw any past governors hanging out with or mentioning Simon Keswick of HK Land before 1997, even though his group own the most of the Class A office space in Central (at least until the late 80's).

The irony is that this favoritism has really helped politicize Hong Kong - which is exactly what Beijing doensn't want to see - as well as creating a little backlash against the Lis, especially after the Hong Kong Tel fiasco. On my recent trip to Hong Kong, a friend of mine told me she does not shop at Park'n Shop or Watson's because it's in the Li group. I've never heard of such stuff in the 70's and 80's, when people hardly cared about politics or ownership. We just shopped where the prices were lowest.