BEIJING, Sept 7 (AFP) - China plans to secure its diplomatic relations with Australia by expanding cooperation on the wool trade, according to Chinese textiles officials.

"China hopes to forge a stronger relationship with Australia in the wool trade which to some extent can influence political and economic ties between the two countries," said Ji Jun, director of international cooperation at the China National Textile Council.

"The wool trade has played such a key role in bilateral trade that any change in the Chinese wool market can have a significant effect on Australia," the China Daily quoted him as saying Saturday.

Ties between Beijing and Canberra moved onto shaky ground last week after Australian Energy Minister John Anderson led a trade mission to Taiwan, which China regards as a renegade province.

To complicate matters further, Foreign Minister Alexander Downer has repeated his resolve to meet next week with the Dalai Lama, Tibet's spiritual leader in exile, despite a series of warnings from Beijing.

In a plan that was discussed with visiting Vice Premier Tim Fischer last month, China is proposing that Australia invest 3.2 million US dollars on three model wool factories in China.

"This will promote the consumption of Australian wool in Chinese industry," Ji said, adding that 28 percent of all Chinese wool supplies originate in Australia.

Canberra provided 3.2 million dollars of financial assistance to China's wool industry between 1993 and 1996.

The industry imports around 100,000 tons of Australian wool a year.