The closure of the Chinese consulate in Houston is the latest salvo in a battle between the United States and China for economic and technological supremacy that is shaping up as a new Cold War and includes a high-stakes race for a COVID-19 vaccine.

The United States ordered the closure of the Chinese consulate in the Texas city of Houston on Wednesday, citing Chinese theft of intellectual property.

The move came a day after the Justice Department unveiled the indictment of two Chinese nationals for hacking hundreds of companies and attempting to steal coronavirus vaccine research.

Republican Senator Marco Rubio, acting chairman of the Senate Intelligence Committee, tweeted that the Houston consulate was the "central node of the Communist Party's vast network of spies & influence operations in the United States."

Houston is one of the largest centers for biotech and medical research in the world.

Foreign policy experts said reprisals can be expected.

"The cardinal rule of diplomacy is reciprocity," said Molly Montgomery, a former diplomat now at the Brookings Institution.

"State doesn't make a decision like this lightly, since it almost certainly will result in the closure of one of our own consulates."

The accusations of Chinese economic espionage appear to be the primary motivation for the US move but it comes against a backdrop of disputes with Beijing on numerous fronts.

"There is no doubt that China represents a tremendous espionage threat for the United States," said Abraham Denmark, Asia program director with the Kissinger Institute on China and the US at The Wilson Center.

"The question here is not China's culpability -- I expect it's solid -- but rather if suddenly closing the consulate in Houston will address the problem," Denmark said.

US accusations that China is engaged in a campaign to steal American corporate secrets are not new.

But President Donald Trump has made it a theme of his trade war with China and made turning up the pressure on Beijing a pillar of his 2016 presidential campaign.

Tensions are rising between the US and China as they battle for global supremacy
Tensions are rising between the US and China as they battle for global supremacy POOL / JASON LEE

Besides trade, US-China relations have also been soured by the COVID-19 pandemic, China's policies in Hong Kong and against the Uighurs in Xinjiang and in the South China Sea.

FBI director Christopher Wray said earlier this month that cases of Chinese economic espionage have soared by 1,300 percent over the past decade.

"We've now reached the point where the FBI is opening a new China-related counterintelligence case about every 10 hours," Wray said.

US Attorney General Bill Barr recently accused China of mounting an "economic blitzkrieg" on global free markets and told US companies to stop compromising their principles to appease Chinese leaders and regulators.

"If Disney and other American corporations continue to bow to Beijing, they risk undermining both their own future competitiveness and prosperity, as well as the classical liberal order that has allowed them to thrive," Barr said.

The coronavirus pandemic has exacerbated tensions between Washington and Beijing with Trump repeatedly lashing out at China for not stopping what he calls the "Chinese virus."

Since May, the United States has accused China of seeking to steal coronavirus vaccine research, an allegation also levelled against the two Chinese hackers named in Tuesday's indictment.

Barr warned not only of a Chinese "economic blitzkrieg" but an attempt by Beijing to "surpass the United States as the world's preeminent superpower."

Some 100 days from the November presidential election, Trump has sought to make US relations with China a central theme of his campaign, accusing his rival, former vice president Joe Biden, of being "soft" on China.

Speaking at a Senate hearing on China, Deputy Secretary of State Stephen Biegun said the United States was facing a "significant challenge in China."

"The one thing that I don't think any of us should expect are fast results," Biegun said. "We're up against a generational challenge here.

"This is a formidable challenge in virtually every dimension of our economic, political, and social and military existence."

Gerard Araud, the former French ambassador to the United States, said the Trump administration was seeking to frame the conflict in ideological terms.

"Most of the time, the US administration is not referring anymore to China but to the (Chinese Communist Party)," Araud said on Twitter. "A crude way to transform a great power rivalry into an ideological crusade."