China warns against Obama-Dalai Lama meeting

BEIJING/WASHINGTON (Reuters) - China warned U.S. President Barack Obama on Wednesday that a meeting between him and the Dalai Lama would further erode ties between the two powers, already troubled by Washington's arms sales to Taiwan.

The White House confirmed on Tuesday that Obama would meet the exiled Tibetan Buddhist leader reviled by Beijing as a separatist for seeking self-rule for his mountain homeland.

China's angry response reflected deepening tension between the world's biggest and third-biggest economies, with Beijing noting that President Hu Jintao himself urged Obama not to meet the exiled Tibetan leader.

Ma Zhaoxu, a Chinese Foreign Ministry spokesman, said his government "resolutely opposes the leader of the United States having contact with the Dalai under any pretext or in any form."

During Hu's summit with Obama in Beijing last November, the Chinese leader "explained China's stern position of resolutely opposing any government leaders and officials meeting the Dalai," said Ma.

"We urge the U.S. to fully grasp the high sensitivity of the Tibetan issues, to prudently and appropriately deal with related matters, and avoid bringing further damage to China-U.S. relations," Ma said.

China's ire at the White House announcement was predictable, as was the White House's confirmation of the meeting, which has long been flagged.

But the flare-up comes soon after Beijing lashed Washington over a $6.4 billion (4 billion pound) U.S. weapons package for Taiwan, the self-ruled island that Beijing deems an illegitimate breakaway province.

It also comes during Sino-U.S. tensions over the value of China's currency, trade protectionism and Internet freedoms.

OBAMA EYES CURRENCY POLICY

Obama told senators from his Democratic Party on Wednesday it was important to address currency rates with trading partners such as China to ensure U.S. goods were not facing a disadvantage by being artificially inflated.

"The approach that we're taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways," he said.

U.S. manufacturers have complained for years that Beijing's currency policies gives Chinese companies an unfair price advantage in international trade. However, China has resisted pressure on the issue and maintains its exchange rate policy is an internal matter.

Obama said it would be a "mistake" to revise or revoke a U.S. trade treaty with China.

Late on Tuesday the U.S. Senate unanimously passed a bi-partisan resolution that called on China to review the cyber attacks against Google and other firms and to make any investigation results of the investigation transparent.

Google, the world's top Internet search engine, said last month it would not abide by Beijing-mandated censorship of its Chinese-language search engine and might quit the Chinese market entirely because of cyber attacks from China. The attacks hit more than 30 foreign firms.

"Unfortunately, recent reports about the behaviour of the Chinese government in cyberspace are raising global doubts about its willingness to be a responsible stakeholder in our international system," said Senator Joseph Lieberman.

Lieberman was a co-sponsor of the resolution, which also voiced backing for U.S. Secretary of State Hillary Clinton's new initiative promoting technology to circumvent electronic censorship and monitoring -- a policy China has condemned.

CHINA GETS TESTIER

Beijing has become increasingly assertive about opposing the Dalai Lama's meetings with foreign leaders, and the issue is a volatile theme among patriotic Chinese, who see Western criticism of Chinese policy in Tibet as meddling.

Protests over Chinese rule in Tibet that upset the London and Paris legs of the torch relay for the 2008 Beijing Olympics drew angry counter-protests by Chinese abroad and demonstrations in China urging boycotts of French goods.

When French President Nicolas Sarkozy would not pull out of meeting the Dalai Lama while his country held the rotating presidency of the European Union in late 2008, China cancelled a summit with the EU and there were Chinese calls for boycotts of French goods.

On Tuesday, a Chinese Communist Party official said any meeting between Obama and the Dalai Lama "would seriously undermine the political basis of Sino-U.S. relations." [ID:nTOE61103T]

The Dalai Lama fled Tibet in 1959 after a failed uprising against Chinese Communist Party forces who entered the region from 1950. He says he wants true autonomy for Tibet under Chinese sovereignty, but Beijing says his demands amount to seeking outright independence.

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.

China's latest statement did not mention any specific retaliation over Obama's planned meeting.

"I think it indicates their nervousness in the issue of Tibet ... the wider world recognising that there is problem in Tibet and China should do something about it," said Thubten Samphel, spokesman of the Tibetan government-in-exile based in Dharamsala, northern India.

The White House shrugged off Beijing's earlier warnings about the meeting, which may happen as early as this month.

The United States says it accepts that Tibet is a part of China and wants Beijing to open up dialogue with the Dalai Lama about the future of the region.

But a Chinese foreign policy analyst said the response from Beijing, increasingly assertive on what it sees as core concerns, would be tougher than Washington anticipates.

"China wants to change the rules of the game," Yuan Peng, head of U.S. studies at the China Institutes of Contemporary International Relations, told the Global Times, a Chinese newspaper.

"Though the U.S. has previously sold weapons to Taiwan and met the Dalai Lama, and we've then railed at the United States, this time there'll be true cursing and retaliation."

(Additional reporting by Doug Palmer in Washington, Ben Blanchard in Beijing, and Reuters Television in Dharamsala; Editing by Nick Macfie and Eric Walsh)

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