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China will hold a fresh round of trade talks with the United States in Washington later this month, Beijing said on Thursday, offering a glimmer of hope for progress in resolving a conflict that has set world financial markets on edge.

A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet U.S. representatives led by Under Secretary of Treasury for International Affairs David Malpass, the Ministry of Commerce said in a statement on its website.

While the engagement 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).

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There also remains a wide gap between the two sides over Washington’s demands that Beijing improve market access and intellectual property protections for U.S. companies, and slash a $375 billion trade deficit with China.

“The lower rank of the delegation suggests that both sides remain far apart, and an agreement reached for this visit is very unlikely,” Jonas Short, head of the Beijing office at investment bank Everbright Sun Hung Kai, wrote in a note.

News of the meeting gave a lift to the yuan and helped cap losses in China’s stock markets.

The world’s two largest economies have been locked in escalating rounds of tit-for-tat tariffs since the start of the year and have threatened further duties on exports worth hundreds of billions of dollars.

The meeting would end what had been a lull in talks between the two sides, but it is unclear whether it will take place before or after Aug. 23, when Washington is due to activate additional tariffs on $16 billion of Chinese goods.

Beijing has said it will retaliate in kind.

The last official round of talks was in early June when U.S. Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He in Beijing.

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There was no immediate response from the U.S. Treasury to the announcement from Beijing.

LOW EXPECTATIONS

The upcoming meeting will be held at a lower-level compared with four earlier rounds of talks.

Having made little progress in the previous meetings, the White House said on Aug. 3 that the United States is open to further talks with China on how to resolve the festering trade dispute.

Four U.S. and Chinese sources in the business community said they had low expectations for the talks, particularly if officials from USTR were not involved. The invitation for talks may have been intended to steady markets, they said.

The U.S. Treasury Department led by Steven 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 USTR’s Robert Lighthizer.

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After negotiations in Washington in May, Beijing believed it had assurances from the U.S. that tariffs were off the table, with Mnuchin saying the trade war and tariffs were “on hold.”

But less than 10 days later, the White House said it would push forward on planned tariffs on $50 billion of Chinese imports and press ahead with restrictions on investments by Chinese companies in the U.S.

“This looks like it will be a waste of time for the two govts (esp China’s)...Who thinks US Treasury Dept is empowered to make THE deal to end the trade war?,” Scott Kennedy, deputy director of the Freeman Chair in China Studies at the Center for Strategic and International Studies in Washington, wrote on Twitter.

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