BEIJING/WASHINGTON China warned President Barack Obama on Wednesday that a meeting with 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 mountainous 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.
During a summit with Obama in Beijing in November, Hu "explained China's stern position of resolutely opposing any government leaders and officials meeting the Dalai," said Ma Zhaoxu, a Chinese Foreign Ministry spokesman.
"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."
The White House shrugged off Beijing's earlier warnings about the meeting, which may happen as early as this month.
China's ire at the U.S. 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 U.S. weapons package for Taiwan, the self-ruled island that Beijing deems a 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 their prices 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," Obama said.
Republican Senator Charles Grassley urged Obama to go further and formally label China as a currency manipulator to make Beijing aware it needs to raise the value of its yuan.
"China is a big beneficiary of international trade, yet it fails to allow its currency to float freely," he said in a statement. "President Obama has the opportunity to change course. His administration can label China a currency manipulator in its upcoming biannual report."
That report is due on April 15.
U.S. manufacturers have complained for years that Beijing's currency policies give Chinese companies an unfair price advantage in international trade. China has resisted pressure on the issue and says its exchange rate policy is an internal matter.
Finance ministers and central bank governors of the Group of Seven rich nations will discuss China's currency this weekend in Canada, a U.S. Treasury official said.
"The Chinese currency issue is on everybody's mind. It's an issue for everybody," the official said.
The United States had not altered its position that the yuan needs to appreciate to help put the world economy on a path to more sustained and balanced growth, he added.
"We certainly believe it's substantially undervalued and we certainly encourage greater flexibility," the official said.
Regarding friction over Internet policy, the U.S. Senate unanimously passed a bipartisan resolution late on Tuesday that calls on China to review the cyber attacks against Google and other companies 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.
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.
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 recognizing that there is a 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 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 John O'Callaghan)