BEIJING, Sept 25 (AFP) - The Chinese government on Wednesday lifted a veto on a visit by Germany's Foreign Minister Klaus Kinkel, imposed because of a dispute over Tibet.

The official Xinhua news agency said the dispute was ended during a meeting Tuesday between China's Foreign Minister Qian Qichen and Kinkel, at the United Nations in New York.

It said the Chinese side welcomed a planned visit to China by German President Roman Herzog "and Kinkel's China-tour."

The dispute started when the German parliament passed a resolution in June criticising China's policy on Tibet. China retaliated by cancelling a visit by Kinkel planned for July.

The cancellation plunged Sino-German relations into their worst crisis since the two sides fell out after the 1989 Tiananmen massacre in Beijing.

Herzog is to visit Beijing from November 18. The German embassy has not announced Kinkel's itinerary, but according to informed sources, he is likely to visit in October.

"We are delighted to see bilateral relations are once again on the right path," a German diplomat said. China and Germany are major trade partners.

Xinhua said that during their New York meeting, Qian and Kinkel "agreed that relations of their countries should be based on the principles of mutual respect (and) non-interference in other's internal affairs."

Kinkel was reported to have said the German government followed a "one China" policy, regarded Tibet as a part of China and held that the affairs of Tibet were China's internal affairs.

On human rights, the two sides noted that "there are differences, but they should be ironed out through dialogues based on equality and mutual respect, rather than confrontation," Xinhua said.

Germany, China's fourth largest trading partner and largest European partner, had been considered by China's government as one of its closest allies. The German parliament's resolution sparked the first serious crisis between the countries since the Tiananmen Square massacre.

Beijing reacted to the resolution on Tibet by calling it intolerable interference in its domestic affairs.

Although the Chinese cancelled Kinkel's visit as well as those of Germany's construction and environment ministers, apparently few German companies were hurt by the dispute, judging from large contracts signed in China recently by industrial giants Siemens and Mercedes Benz.

Only the German insurance firm Allianz, the market leader in Europe, might have suffered a temporary setback in the Chinese insurance market, according to industry sources here.

The company was seen as the favorite to become the first European insurer to be licensed in China at the beginning of the year, but appears to have taken a back seat now to the Swiss group Winterthur, according to foreign insurance industry sources here.