China fights back, shuts US consulate in Chengdu

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China ordered the U.S. to close its consulate in the southwestern city of Chengdu, following through on retaliation threats after the Trump administration’s unprecedented decision to shut down the Chinese mission in Houston.

The Chinese Ministry of Foreign Affairs said Friday that the consulate’s closure was a “legitimate and necessary response to the unjustified act by the U.S.” The widely anticipated retaliation came hours ahead of the U.S.’s deadline for Chinese diplomats to vacate the Houston facility, which the State Department said had served as a hub for spying and influence operations.

Beijing’s decision will not only oust American diplomats from the capital of Sichuan province — a region with a population rivaling Germany — it will close a key listening post for developments in neighboring Tibet. The move will probably have a bigger impact than shutting the U.S. consulate in Wuhan, but less than closing U.S. missions in the key financial centers of Hong Kong or Shanghai.

Foreign Ministry spokesman Wang Wenbin told a regular news briefing in Beijing that some consulate staff had “engaged in activities inconsistent with their capacity, interfered in China’s internal affairs and harmed China’s national security interests.” By Friday afternoon, dozens of police, plainclothes officers and People’s Liberation Army personnel were seen patrolling the street outside the building, searching phones and ordering people to delete photos.

While police ordered most reporters and pedestrians to leave the area, China’s state broadcaster began live-streaming footage of the consulate’s entrance. China’s CSI 300 Index slumped 4.4% at the close, while the ChiNext Index dropped 6.1%, the most since Feb. 3.

“It’s not possible to carry out an entirely equivalent action, but choosing Chengdu shows China wants to reduce the harm made to bilateral relations,” said Wang Yiwei, a former Chinese diplomat and director of China’s Institute of International Affairs at Renmin University in Beijing. “The operations out of Chengdu are not the most high profile of the U.S. mission in China, compared to say Shanghai.”

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The consulate closures illustrate the alarming degree to which relations between the world’s two largest economies have worsened in recent years, as China assumes a more assertive posture on the world stage and the U.S. seeks to check its rise. President Donald Trump and his aides have stepped up attacks on China ahead of the U.S. election in November, accusing Beijing of spying, cybertheft and causing the coronavirus pandemic.

In a speech at the Richard Nixon Presidential Library and Museum, U.S. Secretary of State Michael Pompeo accused President Xi Jinping and the Chinese leadership of attempting to “tyrannize inside and outside China forever” in pursuit of global hegemony. “Securing our freedoms from the Chinese Communist Party is the mission of our time,” Pompeo said.

A commentary published by China’s official Xinhua News Agency moments after the Chengdu announcement said the closure was “aimed at a few extremist forces in the U.S. government, not the American people.” “The U.S. has stirred up trouble in bilateral relations to the point of hysteria,” the commentary said.

In a sign things could deteriorate further, Wang, the Foreign Ministry spokesman, answered a question on Thursday about the future of the U.S.-China trade deal by saying the American side should think “carefully” about where the relationship was heading. Trump said Thursday that his “phase one” deal means “much less” to him in the wake of the pandemic.

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