U.S. Republicans to unveil coronavirus aid proposal as time runs out on jobless benefits

By Susan Cornwell and David Lawder

WASHINGTON (Reuters) – U.S. Senate Republicans on Monday are expected to unveil a $1 trillion coronavirus aid package hammered out with the White House, a starting point for negotiations with Democrats as unemployment benefits that have kept millions of Americans afloat are set to expire.

White House Chief of Staff Mark Meadows told reporters on Sunday that the plan just needed a few clarifications before Senate Majority Leader Mitch McConnell could unveil it on Monday afternoon.

Meadows and U.S. Treasury Secretary Steven Mnuchin said their agreement in principle with Senate Republicans would include an extension of supplemental unemployment benefits that aims to replace 70% of laid off workers’ lost wages.

On Friday, an extra $600 per week in supplemental unemployment benefits is due to expire, severing a financial lifeline for laid-off workers and a key support for consumer spending.

But the extra funds – in some cases exceeding a workers’ former wages – was a sticking point for many Republicans, helping to delay agreement during a week of wrangling over the party’s negotiating position.

Some Republicans had complained about the high price tag; the federal government has already spent $3.7 trillion to cushion the economic blow from pandemic-forced shutdowns.

Mnuchin and Meadows earlier on Sunday floated the idea of a piecemeal approach to coronavirus aid, first addressing unemployment and demands by businesses and schools to be shielded from coronavirus-related lawsuits, while tackling other issues later.

“We are going to be prepared, on Monday, to provide unemployment insurance extension that would be 70% of wages,” Meadows said on ABC’s “This Week” program on Sunday.

DEMOCRATS’ DEMANDS

Democrats decried the Republican delay as U.S. coronavirus cases passed the 4 million mark, a milestone for a pandemic that has killed more than 146,000 people in the United States and thrown tens of millions out of work.

House Speaker Nancy Pelosi said on CBS’ “Face the Nation” on Sunday that if necessary, the House would stay in session until a deal is passed and added that Democrats would not accept a measure urged by Republicans to include liability protections for employers.

“What we will not support is what they’re saying to essential workers: ‘You have to go to work because you’re essential, we place no responsibility on your employer to make that workplace safe and if you get sick you have no recourse because we’ve given your employer protection,'” she said.

Pelosi has said that House Democrats would pursue the $3 trillion coronavirus aid bill that they passed in May, which would extend the extra $600 a week in unemployment benefits through the end of 2020.

The Republican plan will include another round of direct payments of $1,200 for individuals, White House economic adviser Larry Kudlow told CNN. He said it also would extend a federal moratorium on housing evictions contained in previous relief legislation.

Senate aides said the Republican plan also have more help for small businesses, $105 billion for schools, $16 billion for coronavirus testing, and legal protections for business that are reopening.

(Reporting by Susan Cornwell and David Lawder; Editing by Peter Cooney and Gerry Doyle)

China seizes U.S. consulate in Chengdu, retaliating for Houston

By Martin Quin Pollard and Thomas Peter

CHENGDU, China (Reuters) – China took over the premises of the U.S. consulate in the southwestern city of Chengdu on Monday, after ordering the facility to be vacated in retaliation for China’s ouster last week from its consulate in Houston, Texas.

The seizure capped a dramatic escalation in tensions between the world’s two biggest economies that began when employees at China’s Houston consulate were seen burning documents in a courtyard last Tuesday, hours before Beijing announced that it had been ordered to leave the facility.

The U.S. consulate in Chengdu, in Sichuan province, was closed as of 10 a.m (0200) on Monday, and Chinese authorities had entered the building from the front door, China’s Ministry of Foreign Affairs said in a statement.

On Friday, Beijing announced that it had asked the United States to close its Chengdu post, and gave the Americans 72 hours to vacate, the same amount of time China was given to leave its Houston mission, which was shut on Friday.

“We are disappointed by the

By Martin Quin Pollard and Thomas Peter

CHENGDU, China (Reuters) – China took over the premises of the U.S. consulate in the southwestern city of Chengdu on Monday, after ordering the facility to be vacated in retaliation for China’s ouster last week from its consulate in Houston, Texas.

The seizure capped a dramatic escalation in tensions between the world’s two biggest economies that began when employees at China’s Houston consulate were seen burning documents in a courtyard last Tuesday, hours before Beijing announced that it had been ordered to leave the facility.

The U.S. consulate in Chengdu, in Sichuan province, was closed as of 10 a.m (0200) on Monday, and Chinese authorities had entered the building from the front door, China’s Ministry of Foreign Affairs said in a statement.

On Friday, Beijing announced that it had asked the United States to close its Chengdu post, and gave the Americans 72 hours to vacate, the same amount of time China was given to leave its Houston mission, which was shut on Friday.

“We are disappointed by the Chinese Communist Party’s decision and will strive to continue our outreach to the people in this important region through our other posts in China,” a U.S. State Department spokesperson said in an email to Reuters.

At midday on Monday, police removed a roadblock that had restricted access to the Chengdu facility, and dozens of passersby stopped to take photos and videos.

One man stood across the street and played the Chinese national anthem from his phone.

“We feel very sad about the breaking down of the relationship between China and U.S.,” said a bystander outside the facility who said his surname was Li. He said he was worried about the impact of deteriorating relations on Chinese citizens who want to travel or study in the United States.

Grey sheet-like material was placed over the spot near the entrance where a plaque had been affixed, and over the place where there was large lettering saying “U.S. Consulate General”.

The U.S. embassy issued a video in Chinese on its Twitter feed: “The U.S. consulate in Chengdu has been proudly promoting the mutual understanding between Americans and the people in Sichuan, Chongqing, Guizhou, Yunnan and Tibet since 1985. We will forever miss you,” it said.

The American flag was no longer flying at the consulate having been lowered at 6:18 a.m. on Monday, according to video shot by a journalist and shared by state broadcaster CCTV on its Twitter-like Weibo account.

The eagle on top of the flagpole remained.

On Sunday night, a crane was seen entering the consulate compound and hoisting at least one container onto a large truck.

The Chengdu consulate opened in 1985 and had almost 200 employees, including about 150 locally hired staff, according to its website. It was not immediately clear how many had been working there at the time of its closure, after U.S. diplomats were evacuated from China because of the coronavirus pandemic.

U.S.-China relations have plunged to their worst in decades over a range of disputes, from trade and technology to the COVID-19 pandemic, China’s territorial claims in the South China Sea and its clampdown on Hong Kong.

On Thursday, U.S. Secretary of State Mike Pompeo gave a speech calling a more assertive approach to China the “mission of our time”.

(Reporting by Martin Quin Pollard and Thomas Peter; writing by Tony Munroe; editing by Richard Pullin and Raju Gopalakrishnan)

 

Singaporean pleads guilty in U.S. to acting as Chinese intelligence agent: Justice Department

WASHINGTON (Reuters) – A Singaporean man who set up a fake consulting site to solicit information from U.S. government and military workers has pleaded guilty to acting as an illegal agent of Chinese intelligence, the Justice Department said on Friday.

Sentencing for Jun Wei Yeo, also known as Dickson Yeo, will be in October, according to the department. The U.S. is cracking down on Chinese spying, with the FBI having interviewed dozens of visa holders about their possible ties to Chinese intelligence.

On Friday a Chinese researcher who took refuge in the San Francisco consulate was expected to appear in court on allegations she lied about her Chinese military service, while the U.S. counterintelligence agency chief warned China and other nations could interfere with November elections.

(Reporting by Lisa Lambert; editing by Grant McCool)

U.S. CDC reports 4,024,492 coronavirus cases

(Reuters) – The U.S. Centers for Disease Control and Prevention (CDC) on Friday reported 4,024,492 cases of the coronavirus, an increase of 72,219 cases from its previous count, and said that the number of deaths had risen by 1,113 to 143,868.

The CDC reported its tally of cases of the respiratory illness known as COVID-19, caused by the new coronavirus, as of 4 pm ET on July 23 versus its previous report a day earlier.

The CDC figures do not necessarily reflect cases reported by individual states.

(Reporting by Vishwadha Chander in Bengaluru; Editing by Devika Syamnath)

Chinese who took refuge at San Francisco consulate now in U.S. custody: U.S. official

WASHINGTON (Reuters) – A Chinese researcher who took refuge from U.S. authorities at China’s consulate in San Francisco is now in American custody and is expected to appear in court on Friday, a senior U.S. Justice Department official said.

According to court filings in U.S. District Court in San Francisco this week, Juan Tang, who worked at the University of California, Davis, falsely claimed on her visa application that she had not served in the Chinese military. She was charged with visa fraud on June 26.

The Justice Department official told reporters Tang was detained on Thursday night and did not have diplomatic immunity as she was not declared as a diplomatic official.

“She’ll make her initial appearance in court later today,” he said, alleging that Tang was part of a network of associates who concealed their military affiliation when applying for visas.

The Chinese embassy did respond to a request for comment on the case.

(Reporting by David Brunnstrom and Daphne Psaledakis; editing by Jonathan Oatis)

Trump: U.S. Senate Armed Services chairman will not change military bases’ names

By Patricia Zengerle

WASHINGTON (Reuters) – President Donald Trump on Friday said the chairman of the Senate Armed Services Committee, fellow Republican James Inhofe, will not change the names of military bases after Congress passed legislation to rename posts that honor leaders of the Confederate armies who fought against U.S. forces.

“I spoke to highly respected (Chairman) Senator @JimInhofe, who has informed me that he WILL NOT be changing the names of our great Military Bases and Forts, places from which we won two World Wars (and more!),” Trump wrote on Twitter.

The Senate and House of Representatives this week each passed their version of the National Defense Authorization Act, or NDAA, a massive annual bill setting policy for the Pentagon, including purchases from defense contractors.

One provision of the $740 billion legislation passed by both chambers was a requirement that the names of Confederate generals be removed from U.S. military facilities like the Army’s Fort Bragg in North Carolina and Fort Hood in Texas.

Tributes to those military leaders – and other slave owners – have been in focus during weeks of protests sparked by the police killings of Black Americans.

Trump, who has deployed federal forces against protesters he calls “anarchists,” promised to veto the NDAA – which has become law for 59 straight years – if the base-name provision remained in the final version.

Now that the Democratic-led House and Republican-controlled Senate have passed versions of the bill, it goes to conference, where lawmakers will come up with a compromise version.

It was not clear that Inhofe could change the provision, as any final bill must be supported by the Democratic and Republican lawmakers on the conference committee. However, congressional aides said there was no ban on such a change if negotiators agreed.

An Armed Services Committee spokeswoman pointed to Inhofe’s previous pledges to try to dilute the proposal to rename bases and other military assets named for Confederates.

A spokesman for Senator Jack Reed, the top Armed Services Committee Democrat, noted Reed’s view that the bipartisan provision has strong support and his commitment to keeping it in the final NDAA.

Inhofe is running for re-election in Oklahoma, which was not a state during the Civil War. Although some Native American tribes in what would become the state in 1907 sent soldiers to fight for the Confederacy, others rejected the alliance with the secessionists.

Before Trump rejected renaming the bases, senior Pentagon officials had said they were open to discussing the issue.

(Reporting by Patricia Zengerle; Additional reporting by Lisa Lambert and Idrees Ali, Editing by Franklin Paul and Chris Reese)

U.S. drugmaker stocks fall ahead of Trump’s pricing executive orders

(Reuters) – Shares of U.S. drugmakers fell on Friday, ahead of executive orders by President Donald Trump aimed at lowering drug prices.

With a re-election race underway and the coronavirus pandemic raging in the country, the White House is looking to bring down drug prices by reportedly considering tying them to what consumers outside the United States pay.

The S&P 500 was down 1.3%, with drugmakers such as Regeneron Pharmaceuticals Inc. and Pfizer Inc. weighing on the index. The declines were in line with a fall in broader markets.

Given that the speculation of an executive order on drug pricing surfaced roughly a month ago, stocks in the healthcare sector are unlikely to take a hit in the near term, Jefferies analyst Jared Holz said.

The administration’s move would likely be viewed more as political posturing than a critical moment for the pharmaceutical industry, Holz added.

Trump, who had previously urged lawmakers to rein in drug costs, will deliver remarks and sign the executive orders at 3 p.m. EDT (1900 GMT) on Friday, according to the president’s schedule issued by the White House on Thursday.

Drugmakers often negotiate rebates or discounts on their list prices in exchange for favorable treatment from insurers and other healthcare payers. As a result, insurers and covered patients rarely pay the full list price of a drug.

Elimination of rebates is likely not included in the orders, Politico reported on Thursday.

Such an order would be positive for health insurers UnitedHealth Group Inc, Cigna Corp and CVS Health, said Mizuho analyst Ann Hynes.

Cigna and CVS were among the handful of healthcare movers in the black.

Drugmakers Johnson & Johnson and Merck & Co Inc were trading down in morning trading.

(Reporting by Manas Mishra in Bengaluru; Editing by Shinjini Ganguli)

Exclusive: More than 40 countries accuse North Korea of breaching U.N. sanctions

By Michelle Nichols

NEW YORK (Reuters) – More than 40 countries accused North Korea on Friday of illicitly breaching a United Nations cap on refined petroleum imports and called for an immediate halt to deliveries until the end of the year, according to a complaint seen by Reuters.

The 15-member U.N. Security Council imposed an annual cap of 500,000 barrels in December 2017 in a bid to cut off fuel for North Korea’s nuclear weapons and ballistic missile programs.

But in a complaint to the U.N. Security Council North Korea sanctions committee, 43 countries – including the United States, Britain and France – said they estimated that in the first five months of this year Pyongyang had imported more than 1.6 million barrels of refined petroleum via 56 illicit tanker deliveries.

The complaint said North Korean vessels continue to conduct ship-to-ship transfers at sea “on a regular basis as the DPRK’s primary means of importing refined petroleum.” North Korea’s formal name is the Democratic People’s Republic of Korea (DPRK).

The countries asked the Security Council sanctions committee to make an official determination that North Korea had exceeded the cap and “inform member states that they must immediately cease selling, supplying, or transferring refined petroleum products to the DPRK for the remainder of the year.”

Similar requests to the committee in 2018 and 2019 were blocked by North Korean allies Russia and China. They are also the only two countries to have formally reported deliveries of refined petroleum to the Security Council sanctions committee.

“China and Russia collectively have reported 106,094.17 barrels of refined petroleum product transfers … January through May,” the complaint said. “The official accounting of the DPRK’s imports vastly under represents the volume of refined petroleum products that actually enter the DPRK.”

The 43 countries also urged the committee to call on states to “immediately exercise enhanced vigilance regarding the DPRK attempting to procure additional refined petroleum products and to prevent illicit ship-to-ship transfers of refined petroleum products to vessels owned, controlled, or acting on behalf of or working in cooperation with the DPRK.”

North Korea has been subjected to U.N. sanctions since 2006 over its nuclear and ballistic missile programs. While the Security Council has steadily strengthened sanctions, U.N. monitors reported this year that North Korea continued to enhance its programs last year.

North Korean leader Kim Jong Un and U.S. President Donald Trump have met three times since 2018, but failed to make progress on U.S. calls for Pyongyang to give up its nuclear weapons and North Korea’s demands for an end to sanctions.

The complaint to the Security Council committee said: “If the DPRK is able to flagrantly evade international sanctions, it will have little incentive to engage in serious negotiations.”

The North Korean mission to the United Nations in New York did not immediately respond to a request for comment.

(Reporting by Michelle Nichols; Editing by David Gregorio)

Why COVID-19 is killing U.S. diabetes patients at alarming rates

By Chad Terhune, Deborah J. Nelson and Robin Respaut

(Reuters) – Devon Brumfield could hear her father gasping for breath on the phone.

Darrell Cager Sr., 64, had diabetes. So his youngest daughter urged him to seek care. The next day, he collapsed and died in his New Orleans home.

The daughter soon learned the cause: acute respiratory distress from COVID-19. His death certificate noted diabetes as an underlying condition. Brumfield, who lives in Texas and also has type 2 diabetes, is “terrified” she could be next.

“I’m thinking, Lord, this could happen to me,” she said of her father’s death in late March.

She has good reason to fear. As U.S. outbreaks surge, a new government study shows that nearly 40% of people who have died with COVID-19 had diabetes.

Among deaths of those under 65, half had the chronic condition. The U.S. Centers for Disease Control and Prevention analyzed more than 10,000 deaths in 15 states and New York City from February to May.

Jonathan Wortham, a CDC epidemiologist who led the study, called the findings “extremely striking,” with serious implications for those with diabetes and their loved ones.

A separate Reuters survey of states found a similarly high rate of diabetes among people dying from COVID-19 in 12 states and the District of Columbia.

Ten states, including California, Arizona and Michigan, said they weren’t yet reporting diabetes and other underlying conditions, and the rest did not respond – rendering an incomplete picture for policymakers and clinicians struggling to protect those most at-risk.

America’s mortality rates from diabetes have been climbing since 2009 and exceed most other industrialized nations. Blacks and Latinos suffer from diabetes at higher rates than whites and have disproportionately suffered from COVID-19.

“Diabetes was already a slow-moving pandemic. Now COVID-19 has crashed through like a fast-moving wave,” said Elbert Huang, a professor of medicine and director of the University of Chicago’s Center for Chronic Disease Research and Policy.

Keeping diabetes under control – among the best defenses against COVID-19 – has become difficult as the pandemic disrupts medical care, exercise and healthy eating routines.

The high price of insulin has also forced some people to keep working – risking virus exposure – to afford the essential medicine. And as the country grapples with an economic crisis, millions of Americans have lost their jobs and their employer-sponsored health insurance.

Much of this could have been anticipated and addressed with a more comprehensive, national response, said A. Enrique Caballero, a Harvard Medical School endocrinologist and diabetes researcher.

Top health officials should have done more to emphasize the threat to people with diabetes and assuage their fears of hospital visits, he said, while also focusing more on helping patients manage their condition at home.

Policymakers had ample warning that COVID-19 posed a high risk for diabetes patients. In 2003, during the coronavirus outbreak known as SARS, or Severe Acute Respiratory Syndrome, more than 20% of people who died had diabetes.

In 2009, during the H1N1 flu pandemic, patients with diabetes faced triple the risk of hospitalization.

Most recently in 2012, when the coronavirus Middle East Respiratory Syndrome, or MERS, emerged, one study found 60% of patients who entered intensive care or died had diabetes.

The COVID-19 pandemic, however, has unearthed previously unknown complications because it has lasted longer and infected many more people than earlier coronavirus epidemics, said Charles S. Dela Cruz, a Yale University physician-scientist and Director of the Center of Pulmonary Infection Research and Treatment.

Doctors warn that the coronavirus pandemic may indirectly lead to a spike in diabetes-related complications – more emergency-room visits, amputations, vision loss, kidney disease and dialysis.

“My fear is we will see a tsunami of problems once this is over,” said Andrew Boulton, president of the International Diabetes Federation and a medical professor at the University of Manchester in England.

‘ONE BIG PUZZLE’

Researchers have scrambled for months to unravel the connections between diabetes and the coronavirus, uncovering an array of vulnerabilities.

The virus targets the heart, lung and kidneys, organs already weakened in many diabetes patients. COVID-19 also kills more people who are elderly, obese or have high blood pressure, many of whom also have diabetes, studies show.

On the microscopic level, high glucose and lipid counts in diabetes patients can trigger a “cytokine storm,” when the immune system overreacts, attacking the body. Damaged endothelial cells, which provide a protective lining in blood vessels, can lead to inflammation as white blood cells rush to attack the virus and may cause lethal clots to form, emerging research suggests.

“It’s all one big puzzle,” said Yale’s Dela Cruz. “It’s all interrelated.”

Many of their vulnerabilities can be traced to high blood sugar, which can weaken the immune system or damage vital organs. COVID-19 appears not only to thrive in a high-sugar environment but to exacerbate it. Recent evidence suggests the virus may trigger new cases of diabetes.

David Thrasher, a pulmonologist in Montgomery, Alabama, said up to half of COVID-19 patients in his local hospital ICU have diabetes. “They are often my most challenging patients,” he said, and the immune system response may be a big reason why.

‘DIABETES BELT’

The pandemic has ripped through several southern states with some of the nation’s highest diabetes rates. A Reuters examination of state data found that nearly 40% of COVID-19 deaths were people with diabetes in Alabama, Louisiana, Mississippi, North Carolina, South Carolina and West Virginia. Much of this area lies within what the CDC calls the “diabetes belt.”

Alabama has the highest percentage of adults with diabetes at 13.2%, or more than 550,000 people, CDC data show. Diabetes patients accounted for 38% of the state’s COVID-related deaths through June, officials said. Karen Landers, Alabama’s assistant state health officer, said she is particularly heartbroken at the deaths of diabetes patients in their 30s and 40s.

Medical professionals in these states say they struggle to keep patients’ diabetes under control when regular in-person appointments are canceled or limited because of the pandemic.

Sarah Hunter Frazer, a nurse practitioner at the Medical Outreach Ministries clinic for low-income residents in Montgomery, Alabama, said diabetes is common among her COVID-19 patients. With clinic visits on hold, she stays in touch by phone or video chat. If a problem persists, she insists on an outdoors, face-to-face meeting. “We meet them under a shade tree behind the clinic,” Frazer said.

In similar fashion, doctors at the University of North Carolina stepped up their use of telemedicine to reach at-risk rural patients. Despite those efforts, John Buse, a physician and director of the university’s diabetes center, said he’s certain some foot ulcers and dangerously high blood sugars are being missed because people avoid health facilities for fear of the virus.

‘UNDER CONTROL’

Many diabetes patients with severe or deadly cases of COVID-19 were in good health before contracting the virus.

Clark Osojnicki, 56, of Stillwater, Minnesota, had heard early warnings about the risks of the coronavirus for people with diabetes, said his wife, Kris Osojnicki. But the couple didn’t think the admonitions applied to him because his glucose levels were in a healthy range.

“He was incredibly active,” she said.

On a Sunday in mid-March, Osojnicki jogged alongside his border collie, Sonic, on an agility course for dogs inside a suburban Minneapolis gym. Three days later, Osojnicki developed a fever, then body aches, a cough and shortness of breath. He was soon in the hospital, on a ventilator. Clark, a financial systems analyst, died April 6 from a blood clot in the lungs.

Osojnicki is among 255 recorded deaths in Minnesota of people with COVID-19 and diabetes mentioned on their death certificate as of mid-July, according to state data. The records describe people who died as young as 34.

WORKING FOR INSULIN

For years, the skyrocketing cost of insulin has fueled much of the national outrage over drug prices. Early in the pandemic, the American Diabetes Association asked states to eliminate out-of-pocket costs for insulin and other glucose-lowering medications through state-regulated insurance plans.

But no state has fully followed that advice, the ADA said. Vermont suspended deductibles for preventive medications, like insulin, starting in July. Other states ordered insurers to make prescription refills more available but didn’t address cost.

Robert Washington, 68, knew his diabetes put him at risk from COVID-19. When his employer, Gila River’s Lone Butte Casino in Chandler, Arizona, reopened in May, he decided to keep working as a security guard so he could afford insulin.

Washington’s supervisors had assured him he could patrol alone in a golf cart, said his daughter, Lina. But once back at work, he was stationed at the entrance, where long lines of gamblers waited, most without masks, Robert told his daughter.

“He was terrified at what he saw,” Lina said.

He tested positive for the virus in late May and was admitted to the hospital days later. He died from complications of COVID-19 on June 11, his daughter said.

A week after Washington’s death, the casino again closed as COVID-19 cases exploded in the state. The casino did not respond to a request for comment.

“It’s hard to accept he is gone. I have to stop myself from wanting to call him,” said Lina, a sports anchor and reporter at a Sacramento, California, TV station. “A lot of these deaths were in some way preventable.”

(Reporting by Chad Terhune, Deborah J. Nelson and Robin Respaut; Editing by Brian Thevenot)

China orders U.S. to shut Chengdu consulate, retaliating for Houston

By Yew Lun Tian, Tony Munroe and Doina Chiacu

BEIJING/WASHINGTON (Reuters) – China ordered the United States on Friday to close its consulate in the city of Chengdu, responding to a U.S. demand for China to close its Houston consulate, as relations between the world’s two largest economies deteriorate.

The order to close the consulate in Chengdu, in southwestern China’s Sichuan province, continued Beijing’s recent practice of like-for-like responses to U.S. actions.

China had warned it would retaliate after it was this week given 72 hours – until Friday – to vacate its consulate in the Texas city, and had urged the United States to reconsider.

Relations between Washington and Beijing have deteriorated sharply this year over issues ranging from trade and technology to the novel coronavirus, China’s territorial claims in the South China Sea and its clampdown on Hong Kong.

“The Ministry of Foreign Affairs of China informed the U.S. Embassy in China of its decision to withdraw its consent for the establishment and operation of the U.S. Consulate General in Chengdu,” China’s foreign ministry said in a statement.

Foreign ministry spokesman Wang Wenbin said some Chengdu consulate personnel were “conducting activities not in line with their identities” and had interfered in China’s affairs and harmed China’s security interests, but he did not say how.

Senior Chinese diplomat Wang Yi, who is also foreign minister, blamed Washington for the deterioration in ties.

“The current difficult situation in Sino-U.S. relations is entirely caused by the United States, and its goal is trying to interrupt China’s development,” Wang said in a video conversation with his German counterpart.

U.S. President Donald Trump’s administration said the closing of the consulate was aimed at protecting American intellectual property and personal information.

“We urge the CCP (Chinese Communist Party) to cease these malign actions rather than engage in tit-for-tat retaliation,” John Ullyot, a spokesman for the White House National Security Council, said in a statement.

The consulate in Chengdu was given 72 hours to close, or until 10 a.m. on Monday, the editor of the Global Times newspaper said on Twitter.

The consulate opened in 1985 and has almost 200 employees, including about 150 locally hired staff, according to its website. It was not immediately clear how many are there now after U.S. diplomats were evacuated from China during the novel coronavirus outbreak.

Global share markets fell after the announcement, led by a heavy drop in Chinese blue chips, which fell 4.4%, while the yuan hit a two-week low. [MKTS/GLOB]

The U.S. State Department warned Americans in China of a greater risk of arbitrary law enforcement including detention, repeating a similar warning two weeks ago.

TROUBLED TIES

Secretary of State Mike Pompeo said in a speech on Thursday Washington and its allies must use “more creative and assertive ways” to press the Chinese Communist Party to change its ways.

A source had told Reuters China was considering shutting the U.S. consulate in Wuhan, where Washington withdrew staff as the coronavirus outbreak raged.

“The Chengdu consulate is more important than the Wuhan consulate because that is where the U.S. gathers information about Tibet and China’s development of strategic weapons in neighboring regions,” said Wu Xinbo, a professor and American studies expert at Fudan University in Shanghai.

He said the Chengdu consulate was less important for economic activity than U.S. consulates in Shanghai, Guangzhou and Hong Kong.

Chinese social media users, who had denounced the order to close the Houston mission, lauded the response.

The comment, “let’s renovate it into a hotpot restaurant!”, a reference to a popular dish in Chengdu, got 100,000 likes on the Weibo account of state broadcaster CCTV.

(Reporting by Tony Munroe and Yew Lun Tian; additional reporting by Huizhong Wu and Judy Hua in Beijing, Rama Venkat in Bengaluru, Tom Westbrook in Singapore and Doina Chiacu in Washington; Editing by Michael Perry, Timothy Heritage and Jonathan Oatis)