Beijing called the order to close the consulate illegal, and vowed to retaliate.
The business group Greater Houston Partnership expressed regret at the announcement.
In addition to Houston, China has consulates in San Francisco, Los Angeles, Chicago and NY, as well as the embassy in Washington.
Communist Party rulers in Beijing were considering shutting the USA consulate in the central city of Wuhan in retaliation, a source with knowledge of the matter said. Wuhan was the center of the start of the new coronavirus outbreak in China.
Cai Wei, the Chinese consul general, told KTRK-TV in Houston that the order to shut down was quite wrong and "very damaging to US-China relations". The mission played a role in the scandal that brought down Bo Xilai - a now-disgraced former rival to President Xi Jinping - as Bo's deputy sought to defect there, and it is also used by the U.S.to monitor the sensitive situation in Tibet.
Relations between the world's two largest economies have steadily worsened in recent months.
President Trump and some of his senior aides now believe that China used the time - and American goodwill and benevolence through both Republican and Democratic administrations - to "rip off" the USA in an effort to overtake it in the global power sweepstakes.
The US State Department did not reply to a request for comment.
Regarding the USA move as a petty and vile provocation, Andrey Manoilo, doctor of political science at Moscow State Lomonosov University, said from a diplomatic point of view, this is a clearly unfriendly act of the United States.
Indications a deal could be done helped Wall Street into positive territory, with dealers also cheered by an announcement from German firm BioNTech and Pfizer that the government had agreed to pay nearly $2 billion for 100 million doses of a potential vaccine if regulatory approval is granted.
China's Embassy in the USA described the move as "political provocation", and urged the U.S.to "immediately revoke this erroneous decision".
Secretary of State Mike Pompeo said: "We are setting out clear expectations for how the Chinese Communist Party is going to behave".
China warned Thursday that it would be forced to respond to the USA move, which had "severely harmed" relations. And a State Department official suggested that economic measures could be placed on Chinese officials over the issue.
The president has further angered the Chinese by blaming the coronavirus pandemic on China, and frequently refers to COVID-19 as the "China virus" and "kung flu".
The US bearing down on Chinese researchers and consulates comes amid charges that hackers working with the Chinese government have targeted firms developing vaccines for the coronavirus and have stolen hundreds of millions of dollars worth of intellectual property and trade secrets from companies across the world. The U.S. and its allies have also accused Russian Federation of trying to steal Western research into coronavirus vaccines and treatments.