SYDNEY, Sept 25 (AFP) - Australian Prime Minister John Howard Wednesday said he would not bow to Chinese threats of economic retaliation for his planned meeting with the Dalai Lama.

His comments came as Beijing stepped up pressure on Australia over the visit by Tibet's exiled spiritual leader, warning there would be a price to pay for Howard's decision to meet him.

Chinese Foreign Ministry spokesman Shen Guofang said a meeting would "definitely cast a shadow over Sino-Australian relations and unavoidably influence the political, economic and trade relationship between the two countries."

Responding to the warning in a television interview, Howard said: "I hope they don't carry through with their threats, but I don't bow to threats.

"No self-respecting prime minister of this country will ever bow to that kind of threat."

Howard is due to meet the Dalai Lama in his Sydney office Thursday afternoon.

Reports here Wednesday said diplomats and businessmen believe if China carries out the threats, banks and insurance companies would be favoured targets.

They said Beijing calculates that damaging such commercial activities would have minimal impact on Chinese interests.

However, Australian Deputy Prime Minister and Trade Minister Tim Fischer earlier said his country's relations with China were strong enough to survive Howard's meeting with the Dalai Lama that he still hoped there would be no retaliation.

"I believe that the size, the very volume of the business relationship, the political relationship, is so large today that no one circumstance should be allowed to derail it," Fischer said.

The Australian government had not in any way raised the issue of sovereignty and was strongly "committed to a one-China policy in respect of the autonomous region of Tibet," Fischer said in a radio interview.

It remained to be seen if China would accept Howard's statement that he would meet the Dalai Lama only in the Tibetan's capacity as a religious leader.

"The Australian government would urge a focus on all that is positive on both sides of the relationship between Australia and China," said Fischer, who has refused to meet the Dalai Lama.

"I accept that these are matters which I hope will not derail the great common purpose that exists in building our business and diplomatic links between Australia and China."

China has described the decisions of Howard and Foreign Minister Alexander Downer to meet the Dalai Lama as "absurd" and an interference in China's internal affairs.

A commentary, released by the official Xinhua news agency, said Australian politicians who decided to meet the Dalai Lama had deserted Australia's policy of recognising Tibet as a part of China.

"All far-sighted people all over the world have drawn a line of distinction between themselves and Dalai, a conspirator who has been engaged in activities to split China under the cloak of religion," the commentary said.

"But certain Australian politicians have not done so. "On the one hand, they stated repeatedly that they pursue the 'one China' policy. On the other hand, they asserted that meeting with the Dalai Lama does not mean that they support independence of Tibet, adding that this is their concept of values.

"Such a concept of values means one's deeds do not match one's words. "This is really absurd."