The Shenzhen Composite (SZSE) dropped 5% alongside with a drop of 3.86% in the SSE Composite Index (SSEC) as U.S. and China tensions worsened on Friday.
On Friday, July 24, 2020, SSEC closed at 3,196.77 points, dropped 128.34 points or 3.86%. Meanwhile, SZSE closed 5% lower at 2,138.36 points.
The tension between the U.S. and China continued to escalate after the Chinese Consulate in Houston reportedly burned documents at its courtyard, causing smoke to hover around the area and prompting the U.S. on Wednesday to order a closure of the consulate within 72 hours.
On Friday, China retaliated by issuing an order to the United States to withdraw its consulate in Chengdu.
Chinese Foreign Ministry, in a statement on Friday, said its has informed the U.S. Embassy in China of its decision to close the establishment and operation of the U.S. Consulate in Chengdu as it was a “legitimate and necessary response to the unreasonable measures by the United States”.
“The U.S. move seriously breached international law, the basic norms of international relations, and the terms of the China-U.S. Consular Convention. It gravely harmed China-U.S. relations,” said the statement.
“The measure taken by China is a legitimate and necessary response to the unjustified act by the United States. It conforms with international law, the basic norms of international relations, and customary diplomatic practices,” said the statement.