"Death And Bomb Threats" Made Against China's Embassy In Washington; Beijing Blames Trump

Update (1530ET): Unsurprisingly, Beijing has moved on to the 'bargaining' stage of the response, where it is calling on the White House to reverse its decision, while doubling-down on threats to respond.


We suspect frenzied back-door talks are happening as we speak.

* * *

Update (1450ET): Stocks have been blissfully in the green all session, somehow ignorant of the fact that after more than a month of the Trump Administration tossing rocks at Beijing, they finally managed to draw blood with a decision to abruptly shutter the Chinese consulate in Houston, prompting a document-bonfire that was readily documented by the western press.

We didn't need Hu Xijin's tweet below to tell us that Beijing wasn't pleased. The Foreign Ministry spokesman was quick to denounce the decision, and now,  Beijing has chimed in with its second official comment:


In an obvious attempt to leverage the ongoing culture war about equality and racism that is tearing apart the US, the foreign ministry is claiming the Chinese embassy in Washington has received death and bomb threats.


That's of course simply a layup for an even more forceful denunciation, and possibly China's promised "painful" retaliation.

* * *

Update (1230ET): US stocks have climbed off their session lows as Beijing has met speculation about the potential for retaliation by closing the American consulate in Wuhan with an ominous silence. But that silence has just been broken, and due to the fact that it's the middle of the night in China, we suspect this statement was intended for US audiences.

Global Times editor Hu Xijin, one of Beijing's top English-language mouthpieces, said in a tweet sent just minutes ago that the retaliation by closing the Wuhan consulate would be letting the US off easy. When the time comes, the true retaliation will involve "real pain" for the US.

It will also be "unexpected".

So far, markets seem unfazed. We're still waiting for President Trump to chime in.

* * *

Update (0815ET): Sen. Marco Rubio tweeted Wednesday morning that China's Houston consulate was "a massive spy center", and that "forcing it to close is long overdue".

That might help explain the panicked document-burning.

* * *

Following a suspicious document fire that necessitated a visit from the local police yesterday, Washington has turned the tensions with Beijing up to '11' by ordering the immediate closure of the Chinese consulate.

Apparently, the incident occurred just as the US was ordering the abrupt closure of China’s consulate in Houston, citing a need to protect American intellectual property and data. The decision, which rattled global equity markets, has been decried as a dramatic escalation in bilateral tensions as Beijing condemned the order as an outrageous violation of international law. Spokespeople for the Chinese government also slammed the decision as outrageous and unprecedented.

Washington’s order, which according to WSJ was issued just yesterday, marks an "unprecedented escalation" and "a political provocation unilaterally launched by the US," according to Chinese Foreign Ministry spokesman Wang Wenbin, who addressed the issue during his regular press briefing in Beijing.

"China urges the US to immediately rescind its erroneous decision, otherwise China will undertake legitimate and necessary responses."

Reuters is now reporting that China is considering closing the US consulate in Wuhan in retaliation. Though we suspect those diplomats wouldn't mind being stationed elsewhere.

Even Hu Xijin, the typically long-winded editor of the Global Times, could only manage a surprisingly brief "that's crazy".

State Department Spokeswoman Morgan Ortagus didn’t specify which specific actions, if any, inspired Washington’s decision, though she did say: "President Trump insists on fairness and reciprocity in U.S.-China relations."

"The United States will not tolerate the PRC’s violations of our sovereignty and intimidation of our people, just as we have not tolerated the PRC’s unfair trade practices, theft of American jobs and other egregious behavior."

Notably, the DoJ unveiled evidence of a massive hack of COVID-19-related research allegedly orchestrated by China.

So far, details from official sources are scant. However, it's probably worth remembering the scene from yesterday's 'document fire' incident: the Houston police and fire departments responded Tuesday night to a reported document fire at the Chinese Consulate. Footage taken from the building next door shows what appears to be barrels with burning material inside of them.

Seems like a totally normal and non-suspicious reaction to a closure order.

Stocks slumped during the Asian trading session; the offshore yuan also slumped against the greenback.

The Foreign Ministry spokesman continued to hammer the US, saying China has always treated American diplomats 'with respect' (including monitoring their every move), while this isn't the first incident involving China's diplomatic personnel in the US.

"In contrast, the US put restrictions on Chinese diplomats in June and last October, respectively, with no valid reason. [The US] has seized and opened mail and official supplies," Wang said.

Back in December, Washington quietly expelled two Chinese diplomats suspected of espionage after they were caught driving to a sensitive military base in Virginia. But Chinese foreign ministry spokesman Geng Shuang rejected the claims when asked about them by reporters.

China's diplomats are widely regarded members of Chinese society, probably holding a higher status than American diplomats hold. State-controlled media has praised China's diplomats as "Wolf Warriors". Read more about that here.

The HPD said it began receiving reports just after 2000 local time warning about documents being burned at 3417 Montrose Boulevard, where the consulate is located.

The consulate holds a special significance. According to information available online, the consulate "was the first one to be established” in 1979 when the US and China official re-established diplomatic relations.  The consulate's district covers eight southern US states, namely Texas, Oklahoma, Louisiana, Arkansas, Mississippi, Alabama, Georgia, Florida and an unincorporated territory, the Commonwealth of Puerto Rico.