U.S. President Barack Obama will host the Dalai Lama at the White House on Thursday despite China's warning that the meeting with the exiled Tibetan spiritual leader could further damage strained ties.

Obama's first presidential meeting with the Dalai Lama is sure to draw angry complaints from Beijing, which is increasingly at odds with Washington over trade, currencies, U.S. arms sales to Taiwan and Internet censorship.

With the two giant economies so deeply intertwined, tensions are considered unlikely to escalate into outright confrontation. The White House expects only limited fallout.

But the Dalai Lama's visit could complicate Obama's efforts to secure China's help on key issues such as imposing tougher sanctions on Iran, resolving the North Korean nuclear standoff and forging a new global accord on climate change.

By going ahead with the meeting over Chinese objections, Obama may be trying to show his resolve against an increasingly assertive Beijing after facing criticism at home for being too soft with China's leaders on his trip there in November.

Chinese officials have known about this and their reaction is their reaction, White House spokesman Robert Gibbs said dismissively on the eve of the Dalai Lama's visit.

Although admired by millions around the world as a man of peace, the Dalai Lama is accused by Beijing of being a dangerous separatist who foments unrest in Tibet.

Gibbs insisted the United States and China -- the world's largest and third-biggest economies -- have a mature relationship capable of withstanding disagreements.

But mindful of Chinese sensitivities, the White House has sought to strike a balance in the Dalai Lama's visit. It comes on the heels of a U.S. plan to sell $6.4 billion of weapons to Taiwan, which China considers a renegade province.

Seeking to avoid alienating Beijing, Obama had delayed meeting the Dalai Lama until after first seeing Chinese leaders during his Asia trip last year, a snub that drew criticism from U.S. lawmakers and human rights groups.

During Thursday's visit, Obama will not appear in public with the Dalai Lama and -- like his White House predecessors -- will deny him the symbolism of meeting in the Oval Office. Such distinctions will signal to Beijing that the Tibetan monk is not being received as a political leader.

But honoring the Dalai Lama could still help Obama burnish his administration's credentials among human rights activists, who accuse him of focusing on global issues with Beijing at the expense of promoting Chinese democratic reforms.


Zhu Weiqun, a vice minister of the United Front Work Department of China's ruling Communist Party, warned earlier this month that an Obama meeting with the Dalai Lama would damage trust and cooperation between our two countries. The Obama administration ignored China's call to scrap the talks.

Adding to tensions, Obama vowed recently to address currency issues with Beijing and to get much tougher with it on trade. Washington complains that China keeps its currency undervalued, hurting the competitiveness of American goods.

While China has threatened to impose sanctions against U.S. companies and curtail military-to-military contacts over the Taiwan arms sale, Washington expects the response to the Dalai Lama visit to be less threatening.

There is no reason why the reaction this time should be very different from what it's been in the past, which has been they criticize it and then we move on with other aspects of the relationship, a senior administration official said.

Still, China has become bolder, spurred not only by its economic clout but a sense in Beijing that the global economic crisis exposed the weakness of U.S.-style capitalism.

Senior Chinese military officers, for example, have proposed their country boost defense spending and possibly sell some U.S. bonds to punish Washington for the Taiwan arms sale.

But against this backdrop, Chinese authorities allowed the U.S. aircraft carrier Nimitz to sail into Hong Kong on schedule on Wednesday, an apparent signal of the limits of Beijing's anger.

China did trim its stockpile of U.S. Treasuries to $755.4 billion in November, U.S. government data shows, an indication Beijing may at least be willing to act on its concerns about Washington's economic stewardship.

But China remains the second-biggest creditor to the United States, only slightly behind Japan.