LONDON, Sept 19 (AFP) - Australian Foreign Minister Alexander Downer, on a visit to London, on Thursday dismissed China's threat of commercial and economic sanctions over his meeting with the Dalai Lama, saying: "We make our own judgements as to whom we see."

Downer, who addressed the International Institute for Strategic Studies, said in comments afterwards that his meeting last week with the Dalai Lama had been in a private capacity and had no political overtones.

Australian Prime Minister John Howard has said he may meet the Tibetan leader next week.

"We have a one-China policy and we make that perfectly clear to Beijing," Downer said. "We have a good relationship overall with Beijing and it's important that we do."

"In seeing the Dalai Lama I'm not making the point that I support an independant Tibet," Downer said.

"Nor does the Dalai Lama argue that Tibet should be independent from the People's Republic of China. We, since 1972, recognize Tibet as part of the People's Republic of China."

Downer added: "We make our own judgements as to whom we see." On a visit to London in July, the Dalai Lama said he was ready to negotiate "without any pre-condition" on Tibet's future status, whenever the Chinese government publicly indicates that it is ready to talk.

Chinese Foreign Ministry spokesman Shen Guofang said earlier in Beijing that Downer's encounter with the Tibetan spiritual leader who lives in exile in India "will harm the development of Sino-Australian relations and will have consequences, even in the economic and commercial field."

Shen said the meeting in Sydney last weekend constituted "interference in China's internal affairs."

The Tibetan leader was "not just a religious figure, but a politician pursuing separatist activities," Shen added, declining to specify what "concrete measures" China would take against Canberra.

Downer said Australia's relationship with China "should be based on mutual respect. We have our interests and they have theirs. We have our values and they have theirs."

"We have the values of freedom of speech and freedom of expression and they are sacrosanct to us ... absolutely core values in our society. The Beijing administration's values are not identical to ours and this calls for mutual respect," he said.

Downer acknowledged that China's was a powerful and the fastest growing -- economy in the Asia-Pacific region and should be expected to "assert its growing authority" in the region.

But he suggested that Beijing's threat of economic sanctions against Australia had been made before and carried little weight.

"That's what they said to us in 1992 when the prime minister and foreign minister met with the Dalai Lama when he last came to Australia," Downer said. "We respect their concern and we would ask them to respect our values."