US President Donald Trump and Chinese President Xi Jinping have expressed optimism about resolving their bitter trade disputes ahead of a high-stakes meeting planned for the two leaders at the end of November in Argentina.
But within hours of the upbeat assessments, the US Justice Department took aim at another Chinese firm it accused of unfair practices.
This comes as part of an across-the-board pressure campaign by the Trump administration targeting Beijing.
Donald Trump said on Twitter that trade discussions with China were "moving along nicely," and that he planned to meet with Xi on the sidelines of the G20 leaders summit, after the two had a "very good" phone discussion.
Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!— Donald J. Trump (@realDonaldTrump) November 1, 2018
Bloomberg later reported, citing people familiar with the matter, that Trump wants to reach a trade agreement with China at the G20 meeting and that after the call with Xi he had asked officials to begin drafting potential terms.
The report said it was unclear if Trump was easing up on demands that have been resisted by Beijing, and cited one person as saying intellectual property theft is a sticking point on a possible deal.
In comments to state media, Xi said he hoped China and the US would be able to promote a steady and healthy relationship, and that he was willing to meet with Trump in Argentina.
"The two countries' trade teams should strengthen contact and conduct consultations on issues of concern to both sides, and promote a plan that both can accept to reach a consensus on the China-US trade issue," Xi said on CCTV state television.
Xi was quoted by CCTV as saying after the call with Trump that the two leaders had hoped to expand trade co-operation.
Neither leader specified any details of potential progress in their first known direct discussion in several months.
Trump administration officials have said that trade talks with China cannot resume until Beijing comes up with specific actions it is willing take to meet US demands for sweeping changes to policies on technology transfers, industrial subsidies and market access.
The two countries already have imposed tariffs on hundreds of billions of dollars of each other's goods and Trump has threatened to slap tariffs on the remainder of China's $500 billion-plus exports to the US if the disputes cannot be resolved.
Just after the upbeat reports of the Trump-Xi call, the Justice Department announced the latest in a long list of actions against what Trump administration calls China's cheating through intellectual property theft, unfair corporate subsidies and rules hampering US corporations in China.
A Justice Department indictment targeted two companies based in China and Taiwan and three individuals, saying they conspired to steal trade secrets from US semiconductor company Micron Technology.
Earlier this week, prosecutors announced an indictment against 10 defendants, including two Chinese intelligence officers and other computer hackers and co-conspirators, who are all accused of breaking into American company computers to steal data on a turbo fan engine used in commercial jetliners.
US Secretary of State Mike Pompeo said earlier this week that China was probably Washington's biggest long term security challenge and the US was engaged in a "multi-pronged effort to convince China to behave like a normal nation on commerce" and respect international law.
But Trump struck a more affable tone on Twitter after the phone call with Xi.
"Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade," Trump tweeted.
"Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!"
Earlier yesterday, Chinese Premier Li Keqiang told a group of visiting US politicians that China and the US could overcome their differences and get relations back on track if they worked together in a spirit of mutual respect.
China and the United States are locked in an increasingly bitter trade war, and have placed tariffs on some of each others' imports.
Meeting a group of Republican lawmakers in Beijing, China's Li noted the China-US relationship's "ups and downs" over the past four decades of diplomatic ties.
"We do hope that China and the United States will meet each other halfway and work together in the spirit of mutual respect and equality," Li told Trump's fellow Republicans.
Earlier this week, Trump said he thought there would be "a great deal" with China on trade, but warned that he had billions of dollars worth of new tariffs ready to go if a deal did not materialise.
The US has already imposed tariffs on $250 billion worth of Chinese goods, with duties on $200 billion of the total set to increase to 25% from 10% on January 1, 2019.
China has responded with retaliatory duties on $110 billion worth of US goods.