BEIJING China said a possible meeting between President Barack Obama and the Dalai Lama would further harm Sino-U.S. relations, and vowed to go ahead with unspecified sanctions against U.S. firms selling arms to Taiwan.
China has become increasingly vocal in opposing meetings between the Dalai Lama and foreign leaders, and one between the exiled Tibetan leader and Obama would increase tensions between the world's biggest and third biggest economies.
Ties between the United States and China have also soured over trade and currency quarrels, control of the Internet, and Beijing's jailing of dissidents.
There has been widespread speculation that Obama will meet the Dalai Lama as early as this month, when the Tibetan figurehead visits the United States. The White House has not publicly confirmed any such meeting.
Zhu Weiqun, a Vice Minister of the United Front Work Department of China's ruling Communist Party, said his government would vehemently oppose any meeting between Obama and the Tibetan Buddhist monk, who Beijing deems a dangerous separatist.
"If that comes to pass, then China will be strongly opposed as always," Zhu, who's department steers Party policy over ethnic issues, said of the possible meeting.
"If the U.S. leader chooses this time to meet the Dalai Lama, that would damage trust and cooperation between our two countries, and how would that help the United States surmount the current economic crisis?" said Zhu.
China routinely opposes meetings between the Dalai Lama and foreign leaders, especially after violent unrest spread across Tibetan areas in March 2008. Beijing blamed his "clique" for the turmoil, a charge he repeatedly rejected.
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.
But when French President Nicolas Sarkozy would not pull out of meeting the Dalai Lamai while his country held the rotating presidency of the European Union in late 2008, China hit back by cancelling a summit with the EU.
The Dalai Lama has said he wants a high level of genuine autonomy for his homeland, which he fled in 1959. China says that his demands amount to calling for outright independence.
China recently hosted talks with envoys of the Dalai Lama, but those talks 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 their differences over the region's future.
TAIWAN ARMS SALES
Beijing is already irate over U.S. proposals last week to sell $6.4 billion of weapons to Taiwan, the disputed island that China treats as an illegitimate breakaway province.
The United States switched diplomatic recognition from Taipei to Beijing in 1979. But it remains Taiwan's biggest backer and is obliged by the 1979 Taiwan Relations Act to help in the island's defense.
Chinese Foreign Ministry spokesman, Ma Zhaoxu, on Tuesday repeated Beijing's threat to impose sanctions against U.S. companies that sell arms to Taiwan.
"The concerned U.S. companies have ignored China's opposition and insisted on selling weapons to Taiwan. China will impose corresponding sanctions on companies that sell weapons to Taiwan," Ma said told a news conference.
"The United States actions will seriously hurt China's core interests and seriously hurt China-U.S. interests," he said. "This will unavoidably affect China-U.S. cooperation on important international and regional issues."
But Ma fended off repeated questions from reporters asking for details of how China would impose sanctions.
Ma instead repeated almost word-for-word the condemnation of the arms sale Beijing issued on Saturday.
"Wait and see," Ma said as he was leaving the briefing.
Bruce Lemkin, Deputy Under-Secretary of the U.S. Air Force, said China had over-reacted to the arms sales which he said were a "surprise to nobody."
"The U.S. has been consistent with our stated policy and we carry out those policies," he said. "So certainly we believe that China should continue to work with us on issues of mutual concern and to work with Taiwan."
Companies that could be affected by Chinese sanctions include Sikorsky Aircraft Corp, a unit of United Technologies Corp; Lockheed Martin Corp; Raytheon Co; and McDonnell Douglas, a unit of Boeing Co.
Speaking in Singapore, Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes, repeatedly declined to elaborate on any impact on Boeing sales to China arising from the arms sale row.
China says the arms dispute will also damage cooperation with the United States over international issues. Washington has sought stronger Chinese support over several hotspots, chiefly the nuclear ambitions of Iran and North Korea.
Again, Ma would not be drawn into specifics.
A former senior U.S. diplomat earlier told Reuters that China may not follow up strong words with strong measures.
"Let's watch what they do, not what they say, because sometimes tough words in China are a substitute for tough action," said Susan Shirk, a professor specializing in Chinese foreign policy at the University of California, San Diego.
Shirk was formerly a U.S. Deputy Assistant Secretary of State during the Clinton administration. She said the Iran nuclear dispute was one issue that Beijing may use to signal its anger.
China has resisted Western demands for tougher sanctions on Iran. On Tuesday, the spokesman Ma repeated his government's stance that there was room to solve the dispute through negotiations.
(Additional reporting by Simon Rabinovitch in Beijing and Nopporn Wong-Anan in Singapore; Editing by Alex Richardson)