The newsletter will not be published tomorrow, Thursday July 23, as I will be attending a virtual conference.

In case there were still readers who thought US-China relations could not get worse, they worsened overnight. The US has ordered the closure of the PRC’s consulate in Houston, Texas.

When word starting going around last night about the closure I had several conversations with people who believed it was a ploy by the US State Department to force the PRC to relax the COVIDF-19-related rules for US diplomats returning to China, and that the Chinese would back down as they did a few weeks ago when the US announced restrictions on PRC flights to the US in response to PRC restrictions on American carriers flying to China.

From various reports today it sounds like the US move is related to espionage and IP theft activity, and it seems unlikely there could be a deal to keep it open past the Friday deadline. I hope I am wrong.

The official Chinese reactions are of course quite angry, and …