A Chinese delegation, led by Vice Minister of Commerce Wang Shouwen, plans to visit the United States this week for talks on bilateral economic and trade issues, China’s Ministry of Commerce (MOFCOM) announced. Wang is also the Deputy China International Trade Representative. The American delegation will be led by David Malpass, Under Secretary for Inter national Affairs at the U.S. Department of the Treasury. China has reaffirmed its stance of opposing unilateralism and trade protectionism, and not accepting any form of unilateral restrictive trade measures. China welcomes dialogue and communication on the basis of reciprocity, equality and integrity, according to a MOFCOM statement.

While the engagement, at the invitation of the U..S side, was seen by analysts and business officials as positive, they cautioned that the talks were unlikely to lead to a breakthrough given they are among lower-level officials and led on the U.S. side by the Treasury Department, not the U.S. Trade Representative (USTR). The world’s two largest economies have slapped tariffs on tens of billions of dollars worth of each other’s goods since they held their last high-level meeting in June, and have threatened further duties on exports worth hundreds of billions of dollars.

“The lower rank of the delegation suggests that both sides remain far apart, and an agreement during this visit is very unlikely,” Jonas Short, head of the Beijing office of investment bank Everbright Sun Hung Kai, wrote in a note. The meeting would end what had been a lull in talks between the two sides. The last round was held in early June when Chinese Vice Premier Liu He met U.S. Commerce Secretary Wilbur Ross in Beijing. The U.S. Treasury Department, led by Mnuchin, has been viewed as most opposed to tariffs among key Trump administration agencies, espousing a more moderate approach to China than trade hardliners such as the USTR’s Robert Lighthizer, the Shanghai Daily reports.

The China Daily added that Douglas H. Paal, Vice President of the Asia Program at the Carnegie Endowment for International Peace, said the new talks will be difficult, as the two sides have many disparities to resolve. “Having working-level talks on these specific issues is not a bad idea, however, if only to start identifying points of agreement that might be reached considerably later,” Paal said, adding that a breakthrough seemed unlikely before the midterms in November. Gary Hufbauer, a trade expert at the Peterson Institute for International Economics in Washington, said that “for the next few months, I think we will see a defusing of the trade dispute”.

China has banned banks in its free trade zones (FTZs) from certain lending activities to ease pressure on the yuan in offshore markets. The move comes after the yuan weakened against the dollar for nine straight weeks. The move prevents commercial banks from using some interbank accounts to deposit or lend yuan offshore through FTZ schemes. It was aimed at tightening offshore yuan liquidity and making it more expensive to short the Chinese currency, traders said.

U.S. President Donald Trump has signed into law the USD716 billion John S. McCain National Defense Authorization Act that authorizes tougher regulations on foreign investments in the U.S. and broadens the authority of the Committee on Foreign Investment in the U.S. (CFIUS) that reviews foreign investments in the U.S. for national security concerns. The law “significantly expands CFIUS’s jurisdictional ambit, and reflects the most comprehensive reform to CFIUS in its history”, Mario Mancuso, author of “A Dealmaker’s Guide to CFIUS” said. He added that the new law “will capture many investments that have not been historically subject to CFIUS’s review”, including venture capital and private equity deals, as in many cases it shifts the reviewer’s focus “from whether a foreign investor could ‘control’ a U.S. business to whether the foreign investor is ‘non-passive’”. It is the first reform that the review process has undergone in more than a decade. Although the bill did not single out any countries in particular, lawmakers have not shied away from spelling out that China’s acquisitions of U.S. key technologies are their main concern. Analysts have expressed concern over the lack of clarity regarding what kinds of technology will raise red flags for the Committee. The new law also bars U.S. government agencies from buying ZTE products, but allows the company to buy U.S. parts and sell to American consumers.