China vowed retaliation after the US forced the closure of its Houston Consulate, in one of the biggest blows to diplomatic ties between the two countries in decades.
The US government gave China three days to close its consulate in America’s fourth-most populous city in an “unprecedented escalation,” Chinese Foreign Ministry spokesman Wang Wenbin told a regular briefing Wednesday in Beijing. China planned to “react with firm countermeasures” if the Trump administration didn’t “revoke this erroneous decision,” Wang said.
The State Department subsequently confirmed in a statement that it had ordered the consulate closed “to protect American intellectual property and Americans’ private information.” The agency said international agreements required diplomats to respect the laws and regulations of the host nation and not interfere in its internal affairs.
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Futures on the S&P 500 Index dropped with European stocks after China’s announcement, while Treasuries edged higher and the dollar erased a loss.
The yuan weakened and Hong Kong shares deepened their decline. Gold held near $1,850 an ounce and silver retreated from its highest level in about seven years.
The US has clashed with China over everything from trade and 5G networks to territorial disputes and responsibility for the pandemic.
The Justice Department on Tuesday accused two Chinese hackers of working for Beijing to steal or try to steal terabytes of data, including Coronavirus research, from Western companies in 11 nations.
Trey McArver, partner at consultancy Trivium China, said Beijing would struggle to calibrate its response without risking further escalation.
“We have seen a step change in US government actions toward China over the past couple of weeks,” McArver said. “The closing of the consulate is already big news in China, so the government will need to respond.”