Expelling US consular spies an option for China – GT analysts

The Global Times reports that China on Thursday defied widespread expectations for announcing looming countermeasures against the US order to close the Chinese consulate in Houston, indicating what analysts call China's "strategic patience and calm" to ensure that its response is both proportionate and painful for the US.
 

Lead paragraphs

The lack of an announcement on Thursday, which left questions open as to which US consulate, if any, would be closed in retaliation, could be due to the fact that China will thoroughly calculate the implementation, intended impact, and possible US reactions to its countermeasures, in line with China's long-standing decision-making process, analysts said.

They predict that the closure of a US consulate is a practical option.

But because the US has sent many intelligence agents to China under the diplomatic cover, China could also consider expelling hundreds of US "diplomats," since the Trump administration has provided a perfect chance for Beijing to contain Washington's egregious  activities in China. 

more to come...

This article comes on the back of the closure of China's consulate in Houston.

The FBI alleged that a Chinese biological researcher "connected to the Chinese military" has avoided arrest due to "visa fraud" by taking refuge in the Chinese consulate in San Francisco, CNN reported on Thursday.

The US piled on its accusations against China on diplomatic and intelligent affairs following the closure of China's consulate in Houston,

the Global Times wrote. 

The closure of the Chinese consulate seriously harms bilateral ties.

 It could also put business ties between China and the eight US states that the consulate serves in jeopardy, as the work of the consulate to promote economic and trade cooperation would be stopped, according to former Chinese diplomats, experts and business leaders in the US.
 

Meanwhile, some observers and foreign media speculated that the US consulate in Wuhan will be closed by China as retaliation, according to the article.

However, the editor also points out that "Chinese analysts said this is very unlikely as the consulate is small, and most US personnel are not there due to the COVID-19 epidemic situation. Closing the Wuhan consulate would be insignificant compared to the US' reckless order to close China's consulate in Houston. "

Market implications

This news could just be taken in the market's stride on Friday as Asian traders pack up for the week and not regard the speculation as a prevalent threat to relations or serious enough to position upon at this point.

Although the incident of forced closure of China's consulate in Houston is unprecedented in the history of China-US relations, analysts remained confident that the two sides would prevent tensions from escalating, such as military conflicts,

the editor wrote.

We have seen a deterioration in relations between the US and China in recent weeks since the US blamed the virus on China. 

However, relations are at their worst since before the trade agreement in 2019 and that could be reflected in the open of Asian bourses today following a sour lead from Wall Street. 

USD/CNH has already moved higher and the S&P futures have wilted on these speculations. 

If there are any subsequent closures of the US consulates, in say, Hong Kong, then that would certainly be a shot across the bow for markets and likely cause some end of the week ripples. 

Although the chance of closing the consulate in Hong Kong as a countermeasure may be remote, analysts noted that it would be perfect timing for China to clean up "redundant employees" in the US consulate doing intelligence work,

a separate article in the Global Times reported. 

Yin Hongbiao, an expert on Hong Kong affairs at Peking University, told the Global Times on Thursday that Hong Kong is one of the world's major centers for espionage activities, especially for the UK and the US. International relations experts said the US consulate in Hong Kong has long been serving more as an anti-China camp for the US than a diplomatic facility.