"We oppose any attempt by foreign forces to interfere in China's internal affairs using the Dalai Lama as an excuse."

The Dalai Lama is due to make a tour of the United States later this month, including a stop in Washingon, although no meeting with the US president has yet been announced.

China regards the exiled Tibetan leader as a "terrorist", accusing him of encouraging violent unrest in Tibet against China rule.

Zhu's comments came as US officials in Washington dismissed Chinese threats of sanctions against US firms in retaliation for the recent arms sale to Taiwan.

Robert Gibbs, the White House spokesman, said any such move would "unwarranted".

'Consequences'

The sale of $6.4bn worth of arms, including Black Hawk helicopters, missile defence systems and advanced communications technology, has infuriated Beijing which regards Taiwan as a renegade province.

China has not clearly outlined what sanctions it may impose [AFP]
At the weekend Beijing warned that there would be "severe consequences" from the arms sale, saying the move will undermine Chinese-US co-operation.

It quickly announced the suspension of military relations with the US, and raised the prospect of sanctions.

On Monday however, the Obama administration defended the arms sale, justifying the move as preserving the military balance between Taiwan and China.

Philip Crowley, a spokesman for the US State Department, said the sale was consistent with a longstanding US policy of only recognising Beijing but of providing Taiwan with weapons to defend itself.

"We think these defensive arms will contribute to security and stability across the Taiwan Strait," he said.

"We regret the fact that they have suggested they will impose sanctions on US companies involved in the sale of these defensive articles."

Business risk

China's threats however have raised questions over whether Beijing could impose sanctions without undermining its own aviation industries.

The government has not said what sanctions it might impose to penalise the companies involved in building the arms for Taiwan. But the roster of potential targets is predominantly American defence contractors, including Boeing, Lockheed Martin and Raytheon.

Boeing makes the Harpoon Block II missiles included in the sale to Taiwan, but it also has massive sales to China's commercial airlines.

Sikorsky Aircraft Corporation, a unit of United Technologies, is to supply 60 Black Hawk helicopters. Lockheed Martin Corp. has the contract to provide 263 PAC-3 air defense missiles, and Raytheon will supply a Patriot Air and Missile Defense System to the island.

All could face a backlash over the Taiwan arms sales, which are handled through the Foreign Military Sales section of the US Defence Department.

But some of the companies have relatively little business with China, while others - Boeing in particular - have important market positions that analysts say China may not want to upset with sweeping sanctions or boycotts.

The heightened tensions over the arms sale come amid a recent deterioration of Sino-US relations, attributed to a range of disputes including Google's revelations last month that China had been hacking into accounts of the company and human rights activists.