US President Donald Trump has vindicated his pledge to help China's ZTE "get back into business" after critics claimed he was "backing off".
He said the country is working on a "larger trade deal" and the Chinese tech firm buys many parts from the US.
Recently, the US had banned American companies from selling parts to ZTE, after it confessed to making illegal shipments to Iran and North Korea.
However, the franchise was welcomed in China and comes ahead of high-level trade talks this week in Washington aimed at addressing an escalating dispute between the world's two largest economies.
Reports coming from The Wall Street Journal citing sources said that the reprieve for ZTE was being negotiated as part of a possible deal in which China would lift tariffs on certain US agricultural products, such as ginseng, that went into effect in April.
On the other hand, President Trump has released a tweet last Monday reflecting his reaction towards the issue.
He tweeted: "ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies. This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi".
Beijing has made several actions to resolve the situation of ZTE, which employs about 80,000 people, one of its demands for a broader trade agreement with the US.
"We greatly appreciate the positive position of the US on the ZTE issue and are in close communication with the US on the details of the issue," foreign ministry spokesman Lu Kang said.
ZTE halted its operations following last month's ban. The firm had spent more than $2.3bn on imports from about 200 US companies last year and relies on the parts for its equipment, which includes smart phones and telecommunications equipment.
On Monday, May 14, 2018 Commerce Secretary Wilbur Ross told reporters that the US would consider alternatives to a supplier ban.
"ZTE did do some inappropriate things ... the question is are there alternative remedies to the ones we had originally put forward and that's the area we will be exploring very, very promptly," Ross said at the National Press Club in Washington.
