BEIJING - CHINA'S state-controlled press warned on Monday that French President Nicolas Sarkozy's meeting with the Dalai Lama would impact on trade but Beijing did not announce any immediate action.

Mr Sarkozy met the Tibetan spiritual leader on Saturday in Poland, drawing a sharp rebuke from China, which said the meeting had undermined China's ties with France and Europe.

State-run media said Mr Sarkozy can expect the move to shrink the Chinese appetite for French products, in editorials that alluded to boycotts of French goods earlier this year.

'There will inevitably be a heavy price to pay for such a malicious provocation on an issue related to China's national unity and core interests,' said a front-page commentary in the overseas edition of the People's Daily, the Communist Party's main mouthpiece.

The English-language China Daily warned in its lead editorial of a potential Chinese consumer backlash.

'Government preference may determine the purchase of Airbuses, or Boeings. But it cannot... make consumers buy from brand names they feel bad about, be it Louis Vuitton, or Carrefour,' it said Mr Sarkozy went ahead with the meeting despite repeated warnings from Beijing that bilateral relations would be harmed.

China had retaliated even before Saturday's meeting by cancelling a planned EU-China summit.

Mr Sarkozy currently holds the rotating EU presidency.

But it remained unclear whether China would take concrete steps to punish France or the European Union at a time which Chinese leaders are deeply worried that slowing economic growth rates could lead to social instability.

Aside from a few editorials in publications directed at overseas audiences, China state press coverage of the row was mostly muted.

Beijing said on Sunday the meeting had 'undermined the political foundations of Sino-French and Sino-European ties'.

China accuses the Dalai Lama of seeking independence for his Chinese-controlled Himalayan homeland - which he denies - and opposes foreign leaders having contact with him.

Weeks of anti-France demonstrations, targeting French commercial symbols such as retail giant Carrefour, erupted in April after pro-Tibet activists disrupted the Paris leg of the Beijing Olympic torch relay. -- AFP