The Harper government maintained Tuesday there will be no economic fallout from the prime minister's meeting with the Dalai Lama, saying China and Canada can continue doing business without sacrificing Canada's moral code.

Jason Kenney, secretary of state for multiculturalism and Canadian identity, told Canada AM on Tuesday that despite threats from Chinese officials, there will be no repercussions from Monday's official meeting.

"This prime minister, obviously, is someone who has placed a real emphasis on human rights and Canadian values in our foreign policy, and he has said that we can do business without sacrificing our belief in human rights," Kenney said from Ottawa.

"Since we declared the Dalai Lama a honorary citizen, our trade with China has gone up, our exports with China have gone up for the first time in a long time and Chinese tourism to Canada has gone up."

On Monday, Prime Minister Stephen Harper spoke with the Dalai Lama for about 40 minutes in his office. The two men exchanged white Tibetan silk scarves called "khata," the one intended for the Dalai Lama embroidered with the Canadian maple leaf.

The Dalai Lama has visited Canada at least six times. Monday's formal meeting was his first with a Canadian prime minister at a government office.

The Chinese leadership believes the 72-year-old spiritual leader is a political figure with aims to fracture the country. On Monday, Chinese officials called Harper's meeting with the Dalai Lama disgusting conduct on the part of the Canadian government.

During a meeting with members of all three federal opposition parties, the Dalai Lama said criticism of China's communist party has been virtually "wiped out."

He said the father of Chinese communism, Mao Zedong, encouraged criticism both within the Communist Party and from outsiders.

"He always placed emphasis that the Communist Party needs criticism,'' the Dalai Lama said Tuesday. "Without criticism, including self-criticism, without that like fish without water -- cannot survive.

"Similarly, the Communist Party cannot survive without criticism.''

Chinese officials critical

On Tuesday, China's Foreign Ministry called Harper's meeting with the Dalai Lama "gross interference'' in China's affairs.

The ministry said Beijing hopes the Harper government can "reflect on and correct the erroneous actions.''

On Monday, Sun Lushan, an official with the Chinese embassy in Ottawa, said the meeting will "greatly undermine" relations between China and Canada.

"It is a blatant interference in China's internal affairs and has severely hurt the feelings of the Chinese people," he said.

Kenney called the Chinese statement "difficult" but said Canada is one of many western nations that have immense respect for the Nobel laureate.

"It's Canadian hospitality for a respected world figure and an advocate of peace, pluralism and non-violence," Kenney said of Harper's meeting.

The Dalai Lama maintained his talk with Harper was not politically motivated. The spiritual leader is currently on a North American tour to promote Tibetan autonomy and the preservation of Tibetan Buddhist culture ahead of the 2008 Olympic Games in Beijing.

Kenney described him as a "remarkable man" and a "truly holy person."

"At the same time, he's very down to earth and totally unpretentious with a great, almost child-like, sense of humour, "Kenney said.

"He's obviously a man of great courage and at 72 years of age, filled with energy. I think everybody that met with him here in Ottawa was impressed."

It is the Dalai Lama's first visit to Canada since he received honorary Canadian citizenship last year in Vancouver.

In 1949, China invaded the Himalayan nation. The following year, at the age of 16, the Dalai Lama assumed full political power as Head of State and Government in Tibet.

After a failed uprising in 1959, the Dalai Lama fled to northern India where he remains in exile.

With files from The Canadian Press