By Philippe Naughton

SYDNEY, Sept 25 (Reuter) - Australian Prime Minister John Howard, who has angered Beijing by agreeing to see the Dalai Lama, said on Wednesday he would not bow to Chinese trade threats over his meeting with the exiled Tibetan leader.

"I hope they don't carry through with that threat, but I don't bow to threats," Howard told Channel Nine television on the eve of the meeting.

"No self-respecting prime minister of this country would ever bow to that kind of threat," he added.

A Chinese foreign ministry spokesman on Tuesday threatened possible trade retaliation after news that Howard would receive the Dalai Lama in his Sydney office on Thursday.

"The Australian government receiving the Dalai Lama is interference in China's internal affairs," said Shen Guofang.

China views the Dalai Lama as a politically inspired troublemaker in his bid for Tibetan autonomy.

But earlier on Wednesday, Beijing indicated that a diplomatic spat with Germany over Tibet had ended by inviting Germany's president for a visit and renewing an invitation to German Foreign Minister Klaus Kinkel.

Kinkel had been due to visit China in July, but Beijing withdrew its invitation after German parliamentarians passed a resolution accusing China of trying to eradicate Tibet's cultural identity.

China invaded Tibet in 1950 and claims ancient sovereignty over the remote Himalayan region.

The Dalai Lama, a Buddhist god-king at home, fled in 1959 after an abortive rebellion against Chinese rule.

Howard told Channel Nine that he thought the latest row should never have happened: "I think they've created a problem out of nothing. It was never on for the prime minister of Australia not to meet the Dalai Lama.

"I'm going to meet him. He's a religious leader of some consequence," he said.

"What I'm saying is that there's no reason why my extending the normal courtesy of meeting him should affect the relationship between Australia and China. I've made that clear to the Chinese," Howard said.

Howard's political aides, including Defence Minister Ian McLachlan, defended the prime minister's decision to meet the Dalai Lama.

"We're a democracy and we can do what we think is right. If we want to meet the Dalai Lama, well that's the way it is," McLachlan told reporters. "If we never offended any country, ever, we would not do anything."

Meanwhile, Howard came under increased pressure to push Beijing to begin talks on Tibet's future.

The Australia Tibet Council urged him to back the Dalai Lama's campaign for autonomy for his Himalayan homeland.

Neither the prime minister's office nor officials with the Dalai Lama could say what would be discussed at Thursday's meeting, although Howard aides were keen to portray it as a private meeting with a religious leader.

The meeting will be at Howard's Sydney office, where he conducts most of his business when parliament in Canberra is not in session.