This morning the Trump Administration ordered China to close its consulate in Houston by Friday. China vowed to retaliate, calling the move illegal.
The United States accused Chinese diplomats of aiding a nationwide pattern of economic espionage and attempted theft of scientific research.
The accusation is certainly part of a move in the President’s re-election effort to ramp up criticism of China in an effort to portray Joe Biden, the Democratic candidate in the November election, as weak on China.
But sometimes where’s there’s smoke there’s fire–and that could be the case here. Certainly Chinese diplomats have provided enough fuel in the form of “strange” moves lately to give the accusation of spying some heft. For example, the Houston consul general and two other diplomats were recently caught at the George Bush International Airport using false identification to escort Chinese travelers to the gate of a charter flight, said David R. Stilwell, who oversees policy for East Asia and the Pacific at the State Department. Stilwell told the New York Times that a acceleration of what he called attempted scientific thefts could be related to the race for a coronavirus vaccine. The Times notes that Stilwell did not provide any evidence of that charge.
In Beijing, Wang Wenbin, a spokesman for China’s Ministry of Foreign Affairs urged the United States to reverse the decision immediately. “Otherwise China will certainly make legitimate and necessary reactions,” he said, which would would, at a minimum, include closing a U.S. consulate in China. Wang called the move illegal under international law, and described it as the latest in a series of aggressions. “For some time, the United States government has been shifting the blame to China with stigmatization and unwarranted attacks against China’s social system, harassing Chinese diplomatic and consular staff in America, intimidating and interrogating Chinese students and confiscating their personal electrical devices, even detaining them without cause,” he said.
On Monday, the Justice Department announced visa fraud charges against Song Chen, a visiting Stanford University researcher accused of concealing her active membership in the Chinese military. In December, the U.S. authorities arrested a Chinese cancer-cell researcher, Zaoso Zheng, at Boston Logan International Airport on charges that he was attempting to smuggle 21 vials of stolen biological research back to China.
Chinese stocks traded in New York haven’t plunged on the news, but investors are clearly not amused. Shares of Alibaba Group (BABA) and Tencent Holdings (TCEHY) were down 2.67% and 2.36%, respectively, as of 3:30 p.m. New York time. JD.Conm (JD) was lower by 1.42% and volatile Meituan Dianping (MPNGF) fell 4.96. The iShares China Large Cap ETF (FXI) was off 1.59%.