BEIJING (Reuters) The United States has told the Chinese consulate in Houston to shut down in three days, citing a need to protect American intellectual property and information, amid a sharp deterioration in relations between the two countries.

Beijing condemned the order and threatened retaliation. A source said China was considering closing the U.S. consulate in the city of Wuhan.

Ties between the United States and China have become increasingly tense since the outbreak of the novel coronavirus in Wuhan at the beginning of the year.

The U.S. Department of State confirmed the impending closure of the Houston consulate, after Chinas foreign ministry reported it had been told to shut the mission.

The news ruffled financial markets with a bout of risk aversion in European stock trading.

The closure had been ordered in order to protect American intellectual property and Americans private information, State Department Morgan Ortagus spokesperson said in a statement.

The United States will not tolerate the PRCs violations of our sovereignty and intimidation of our people, just as we have not tolerated the PRCs unfair trade practices, theft of American jobs, and other egregious behavior, she added, referring to China by its official name, the Peoples Republic of China.

The two countries have clashed recently over trade, technology, a national security law imposed on Hong Kong and Chinas claims in the South China Sea.

China denounced the U.S. order as an escalation.

The unilateral closure of Chinas consulate general in Houston within a short period of time is an unprecedented escalation of its recent actions against China, Chinese foreign ministry spokesman Wang Wenbin told a regular news briefing.

We urge the U.S. to immediately revoke this erroneous decision. Should it insist on going down this wrong path, China will react with firm countermeasures, he said.

The U.S. government has been harassing Chinese diplomats and consular staff for some time, Wang said, as well as intimidating and interrogating Chinese students and confiscating their personal electrical devices, even detaining them.