The US has ordered China to close its consulate in Houston, the Chinese foreign ministry said today. It described the move as an "unprecedented escalation" in tensions.
Local television pictures showed smoke and flames in the building's courtyard, apparently caused by documents being burned.
There was no immediate comment from the US government. Relations between the US and China are increasingly strained, but it is unclear what prompted the latest move.
China said it strongly condemned the move as a political provocation initiated by the US. It promised to react with "firm countermeasures".
Houston, the centre of the US oil industry, is also the main location for Chinese state-controlled energy firms' US trading operations. Companies including Unipec and ChinaOil often rotate traders through their Houston offices, to gain exposure to the burgeoning US Gulf coast crude export markets. The Houston consulate handles traders' visa applications, which have already been subject to long delays.
Crude futures, stock markets and the yuan weakened after the news emerged.
