Trump Stirs China Tension With Consulate Shutdown. What’s Next?

    As the Trump Administration ratchets up tensions, will the closure of China’s consulate in Houston lead the global economy even further into recession?
    As the Trump Administration ratchets up tensions with China, will the closure of China’s consulate in Houston lead the global economy even further into recession?Photo: Shutterstock
    Adina-Laura AchimAuthor
      Published   in Macro

    According to the Chinese Foreign Ministry, the United States government has ordered China to “cease all operations and events” at its consulate in Houston, Texas. Wang Wenbin, the Chinese Foreign Ministry Spokesperson, reiterated that China was notified on July 21 that it had 72 hours to close the consulate. “The unilateral closure of China’s consulate general in Houston within a short period of time is an unprecedented escalation of its recent actions against China.” Meanwhile, on Wednesday, July 22, Morgan Ortagus, the US State Department spokeswoman, said the US has requested the shutdown of the consulate “in order to protect American intellectual property and Americans’ private information.” CNN reports that the Chinese Foreign Ministry condemned the decision and urged the United States to withdraw it. In a statement posted on its official social media account, the Chinese Foreign Ministry said the US has been "shifting the blame to China with stigmatization and unwarranted attacks against China's social system, harassing Chinese diplomatic and consular staff in the US, intimidating and interrogating Chinese students and confiscating their personal electrical devices, even detaining them without cause."

    Jing Take:#

    The sudden move by the US has been interpreted as a direct provocation against China, and it’s expected that Beijing will retaliate. According to What’s On Weibo, Global Times editor-in-chief Hu Xijin (胡锡进), called the American demand to close the consulate “crazy” in a post on his Weibo account. “Not only did the American side order to have the consulate closed,” Hu Xijin writes. “They also only gave the Chinese side three days to evacuate [the compound]. This is completely deranged.” Not long after, negative and enraged comments started pouring in, with users wondering if “America has gone insane” or if this is “meant to break off diplomatic relations with China.” Some users suggested that China should close the American consulate in Wuhan or Hong Kong.

    There’s also concern that this reckless move will ultimately backfire against American citizens living in China. Moreover, the likelihood of a hike in ethnic nationalism and Anti-American sentiment will only further punish the American business community and US brands in China. At this point, China could reference national security concerns while blacklisting American companies. In addition, Beijing could implement regulatory barriers that could further restrict market access. Regardless of the path that China selects, it’s self-evident that the US-China row is only shrinking global market opportunities, plunging the global economy even further into recession.

    The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

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