Will Things Get Worse Now That America Closed China's Consulate in Houston?

July 24, 2020 Topic: Security Region: Asia Blog Brand: The Buzz Tags: ChinaAmericaConsulateHouston ConsulateTrade WarIP Theft

Will Things Get Worse Now That America Closed China's Consulate in Houston?

Each great power's cycle of tit-for-tat is speeding up.

Washington's closure of the Chinese consulate in Houston introduces a new conflict point in U.S.-China relations, but the impact will depend on the narrative and justification for the U.S. decision and whether Beijing retaliates proportionately or further escalates tensions. On July 21, the U.S. government reportedly gave China 72 hours to shut down its consulate in Houston, Texas. The State Department cited the consulate's recurrent violations of U.S. sovereignty, including espionage and influence operations. 

  • In recent years, U.S. officials have voiced concerns about China using its embassy in Washington D.C., as well its five consulates across the United States, for spying and political influence operations. The Houston consulate, in particular, has reportedly been under FBI scrutiny for several years due to the alleged presence of Chinese intelligence officers. 
  • David R. Stilwell, the U.S. assistant secretary of state for East Asian and Pacific affairs, described the Houston consulate as the key center of Chinese research theft in the United States, which has risen over the past six months. He added that the Chinese Houston consul general and two other diplomats were recently caught using fake identification to escort Chinese travelers to a Houston charter flight.
  • The closure of the consulate comes on the heels of a separate July 21 indictment of two Chinese nationals by the U.S. Department of Justice for their alleged involvement in illicit, state-linked hacking activity over the past decade. The hackers' most recent accusations include working on the behalf of the Chinese Ministry of State Security to target COVID-19 vaccine and testing research in the United States. Their earlier alleged activities include hacking of U.S. defense contractors working on chemical weapons detection as well as laser, microwave and satellite technology, as well as Chinese activists, including Hong Kong activists and church leaders. 

The Meaning of the U.S's Motive

Further details will determine whether the decision deviates from the White House's pattern of pressuring China but stopping short of moves that would risk destroying the two countries' phase one trade deal. If it becomes apparent that the United States closed the consulate in response to an immediate security threat, it would indicate a continuation of the administration's more measured approach to Chinese threats in recent months. However, if the move is not linked to particularly egregious activity at the consulate, it may indicate that the White House is adopting a more aggressive posture against Beijing ahead of the November election. 

  • On July 14, U.S. President Donald Trump signed the Hong Kong Autonomy Act, paving way for sanctions on Chinese and Hong Kong officials. But leaks have since indicated the White House is reluctant to move quickly on such sanctions in order to protect its trade deal with Beijing. The Trump administration has also shelved plans to go after Hong Kong's dollar peg out of concern for the trade deal and U.S. economic interest.
  • The United States' first-ever rejection of specific Chinese maritime claims in the South China Sea carefully avoided Chinese red lines as well. While high profile, the State Department's July 13 announcement fell short of implying U.S. military moves or officially recognizing the claims of Chinese counter-claimants in the region.
  • The United States and China have also been locked in a cycle of tit-for-tat moves against journalists in recent months. In May, Washington imposed restrictions on Chinese state-run outlets, prompting reciprocal moves against U.S. media in China. But both sides have carefully avoided escalation. 

The Range of Chinese Retaliation

China can exercise several retaliatory options ranging from tit-for-tat moves on U.S. missions in China, to more aggressive escalatory actions that would incite further U.S. action. China's foreign ministry has already accused the United States of both violating the two countries' bilateral consular agreement, as well as past harassment of Chinese diplomatic staff and students. The ministry also said the U.S. has imposed restrictions twice over the past year on diplomatic staff and unsealed diplomatic bags without permission, confiscating items.

Beijing is reportedly considering shutting down the U.S. consulate in Wuhan in retaliation, though closing U.S. Hong Kong-Macau consulate (which is located in Hong Kong) received the most votes in a July 22 reader poll conducted by the Chinese state-run tabloid Global Times. Amid already high tensions over Beijing's controversial Hong Kong security law, however, targeting either of the Hong Kong consulates would be on the most extreme end of potential retaliatory actions from China, and could harken a sharp escalation in tensions and possibly the end of the phase one trade deal. Given this risk of further U.S. retaliation, China instead remains most likely to take a more measured response.

  • On the lower end of the escalatory spectrum, this could include closing the U.S. consulate in either Wuhan or Chengdu, which are both roughly equivalent in importance to Washington as the Houston consulate is to Beijing.
  • A mid-range move could include closing the U.S. consulate in Shenyang (which would hinder Washington's outreach to North Korea), or limiting the return of U.S. diplomatic personnel to China following their COVID-19 evacuation (which could be done in a less overt manner by raising administrative barriers). 
  • Higher-level moves could include closing the U.S. consulate in Shanghai or Guangzhou, which are essential for U.S. financial and tech companies sourcing from China, respectively.

What the Closure of a Consulate Could Mean for U.S.-China Tensions is republished with the permission of Stratfor Worldview, a geopolitical forecasting and intelligence publication from RANE, the Risk Assistance Network + Exchange. As the world's leading geopolitical intelligence platform, Stratfor Worldview brings global events into valuable perspective, empowering businesses, governments and individuals to more confidently navigate their way through an increasingly complex international environment. Stratfor is a RANE (Risk Assistance Network + Exchange) company.

Image: Reuters.