A fire engine is seen outside the Chinese consulate in Houston © David J. Phillip/AP

The US ordered China to shut its consulate in Houston over spying concerns, ratcheting up tensions between the world’s two most powerful nations and drawing a threat of reprisals from Beijing.

The Chinese government immediately condemned the move and warned it would retaliate unless Washington rethought the decision. The US had ordered that the consulate be shut by Friday, Beijing said.

Video footage showed flames coming from the site in the US’s fourth-largest city and fire trucks parked outside, with local media reporting that consulate staff appeared to be burning documents in the courtyard.

The US state department said: “We have directed the closure of PRC Consulate General Houston in order to protect American intellectual property and Americans’ private information.”

China said the move “seriously violates” the norms of international relations.

It adds to bad blood between the US and China, which are increasingly at odds over a host of issues including trade, rival military ambitions, Hong Kong and efforts to stem the coronavirus pandemic.

The request to close the consulate was made after the US Department of Justice on Tuesday unsealed an indictment charging two Chinese hackers with targeting American companies conducting coronavirus research.

During a visit to Denmark on Wednesday, US secretary of state Mike Pompeo said the Chinese Communist party was a “threat to freedom everywhere”, and that China’s IP theft had cost hundreds of thousands of jobs across Europe and America. 

“President [Donald] Trump has said enough — we’re not going to allow this to continue to happen,” Mr Pompeo said.

A state department spokesperson said China had “engaged for years in massive illegal spying and influence operations throughout the United States against US government officials and American citizens.”

Daniel Hoffman, a former CIA station chief, said the spy agency would have “gamed out” how China would respond to the consulate closure and that the administration had decided it could stomach the results.

“These are all the bellwethers of a 21st-century cold war,” he said of the new tensions and consulate closure.

Besides its embassy in Washington and the consulate in Houston, China also has four other US diplomatic missions in New York, Chicago, San Francisco and Los Angeles.

The sudden escalation in tensions knocked China’s currency. Hong Kong’s Hang Seng stock index fell 2 per cent immediately following the news. China’s CSI 300 of Shanghai- and Shenzhen-listed shares surrendered most of its gains after earlier rallying as much as 2.1 per cent.

Wang Wenbin, a spokesperson for China’s foreign ministry, said the decision to close the consulate “in a limited time is an unprecedented escalation”.

“It seriously violates international law and basic norms of international relations,” added Mr Wang, according to Chinese state media. The US state department cited the Vienna Convention in its decision to close the consulate.

A spokesman for China’s foreign ministry said the US decision on the Houston office (pictured) represented an ‘unprecedented escalation’  © David J. Phillip/AP

Hu Xijin, editor-in-chief of state-owned tabloid Global Times, described the decision on Twitter as “a crazy move”.

Bonnie Glaser, China expert at the Center for Strategic and International Studies, said China would “almost certainly shut down the US consulate in Wuhan in retaliation”.

The Trump administration has previously closed Russian consulates in San Francisco and Seattle and expelled dozens of its diplomats, citing spying concerns, but this is the first time it has directly targeted Chinese sites in the US.

Chinese officials framed the action as an attempt to smear Beijing. “For a period of time, the US government has continuously shifted blame and responsibility, stigmatising China,” said Mr Wang.

Beijing also alleged that the US had in recent months repeatedly opened its diplomatic pouches, which are used to send items confidentially between overseas missions and home countries without customs inspections. It said the US had also seized China’s official work items.

Marco Rubio, acting chairman of the Senate committee on intelligence, tweeted on Wednesday: “China’s Houston consulate is a massive spy centre, forcing it to close is long overdue.”

He said it was the “central node of the Communist Party’s vast network of spies [and] influence operations in the United States”, adding China’s “spies” had 72 hours to leave “or face arrest”.

Additional reporting by Adam Samson and Eva Szalay in London

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