The US said it has ordered China to close its consulate in Houston “to protect American intellectual property” and the private information of Americans.
China condemned the move, which comes at a time of rising tensions between the world’s two largest economies.
Foreign ministry spokesman Wang Wenbin called it “an outrageous and unjustified move that will sabotage relations between the two countries”.
He warned of firm countermeasures if the US does not reverse its decision, which he said the consulate was informed of on Tuesday.
Besides its embassy in Beijing, the US has five consulates in mainland China in Shanghai, Guangzhou, Chengdu, Wuhan and Shenyang, according to its website.
Media reports in Houston said that authorities had responded to reports of a fire at the Chinese consulate and witnesses said that people were burning paper in what appeared to be rubbish bins, the Houston Chronicle reported.
Police were told that occupants were given until 4pm on Friday to leave the property, the newspaper said.
The Houston Police Department tweeted: “About 8:25 pm on Tuesday, our officers responded to a meet the firefighter call to the China Consulate General in Houston building at 3417 Montrose Blvd.
“Smoke was observed in an outside courtyard area. Officers were not granted access to enter the building.”
The US did not provide any details on its allegations in a brief statement.
“The United States will not tolerate (China’s) violations of our sovereignty and intimidation of our people, just as we have not tolerated (its) unfair trade practices, theft of American jobs, and other egregious behaviour,” said the statement.
Mr Wang accused the US of opening Chinese diplomatic pouches without permission multiple times, confiscating Chinese items for official use and imposing restrictions on Chinese diplomats in the US last October and again in June.
He also said that US diplomats in China engage in infiltration activities.
“If we compare the two, it is only too evident which is engaged in interference, infiltration and confrontation,” Mr Wang said.
He also said the Chinese embassy in Washington has received bomb and death threats, and blamed the US government for fanning hatred against China.