By Matt Spetalnick
WASHINGTON (Reuters) - The White House announced on Thursday that President Barack Obama and the Dalai Lama would meet on February 18, despite China's warning that such talks could hurt already-strained Sino-U.S. relations.
In a swift response, Beijing urged Obama to "immediately" scrap the planned White House meeting with the exiled Tibetan spiritual leader, China's state news agency Xinhua said.
The Dalai Lama's visit is likely to set off a new round of sniping from Beijing, already at odds with Washington over issues from trade to currencies to U.S. arms sales to Taiwan.
But the Obama administration is ready to weather China's displeasure over the Dalai Lama and expects its response to be no worse than in the past, "which is to criticise it and then we move on," a senior U.S. official said, speaking on condition of anonymity.
"The Dalai Lama is an internationally respected religious leader and spokesman for Tibetan rights, and the president looks forward to an engaging and constructive dialogue," White House spokesman Robert Gibbs said.
Mindful of Chinese sensibilities, Obama had held off meeting the Dalai Lama, until after the president first saw Chinese leaders during a trip to Asia in November, a delay that angered some U.S. lawmakers and human rights groups.
But the White House made clear in recent days it would shrug off China's opposition and go ahead with the visit. All that was left was to set the date for the meeting with the Dalai Lama, whom Beijing regards as a dangerous separatist responsible for fomenting unrest in Tibet.
FEARS OF RETALIATION
Tensions over the Dalai Lama and other issues have raised worries China might retaliate by obstructing U.S. efforts in other areas, such as imposing tougher sanctions on Iran over its nuclear program.
But Gibbs insisted the relationship between the United States and China -- the world's largest and third-biggest economies -- is "mature enough" to find common ground on issues of mutual interest despite disagreements on other topics.
He said Obama, for example, has not been shy about talking to the Chinese about U.S. concerns over their currency and problems with Internet freedom. "We know that two countries aren't going to agree on everything," Gibbs said.
Despite that, the senior U.S. official said the administration was braced for possibly months of "coolness" from China "but it's not going to overwhelm the relationship, nor is it going to be long term."
Adding to the latest friction, Obama vowed last week to address currency problems with Beijing and to "get much tougher" with it on trade to ensure U.S. goods do not face a competitive disadvantage.
China is the single biggest holder of U.S. Treasuries, owning at least $776.4 billion in U.S. government debt at the end of June 2009, according to statistics from Washington.
Zhu Weiqun, a vice minister of the United Front Work Department of China's ruling Communist Party, said last week such a meeting "would damage trust and cooperation between our two countries, and how would that help the United States surmount the current economic crisis?"
Previous U.S. presidents, including Obama's predecessor, George W. Bush, have met the Dalai Lama, drawing angry words from Beijing but no substantive reprisals.
In keeping with past practice, Obama will deny the Dalai Lama the trappings of an Oval Office visit, sitting down with him in the Map Room, a distinction that will signal to Beijing the Tibetan monk is not being received as a political leader.
TENSIONS OVER TAIWAN
The Dalai Lama has said he wants a high level of genuine autonomy for his homeland, which he fled in 1959. China says his demands amount to calling for outright independence.
China recently hosted talks with envoys of the Dalai Lama but they achieved little. The United States says it accepts Tibet is a part of China but wants Beijing to sit down with the Dalai Lama to address differences over the region's future.
Beijing is already irate over U.S. proposals last week to sell $6.4 billion (4.1 billion pounds) in weapons to Taiwan, the island China treats as an illegitimate breakaway province.
China has vowed to impose unspecified sanctions against U.S. companies selling arms to Taiwan and curtail military-to-military contacts. But the senior U.S. official played down any Chinese retaliation, saying its response to the arms sale "has been roughly in the range that we anticipated."
Senior Chinese military officers have proposed their country will boost defence spending and possibly sell some U.S. bonds to punish Washington for its latest round of proposed arms sales to Taiwan.
Despite that, U.S. officials said on Thursday China had cleared a U.S. aircraft carrier, the USS Nimitz, to visit Hong Kong NEXT (NXT.LO)week. The visit would mark a concession from Beijing.
(Additional reporting by Jim Wolf and Ross Colvin, Caren Bohan and Jeff Mason in Washington and James Pomfret in Hong Kong; editing by Eric Walsh and Todd Eastham)
