US President Donald Trump has said he wants to help save ZTE, one of China’s biggest telecoms companies.
The firm suspended its main operations after the US commerce department banned American companies from selling it components for seven years.
ZTE pleaded guilty to making illegal shipments to Iran and North Korea.
Mr Trump tweeted that he was working with President Xi to ensure ZTE would get back into business fast, saying too many jobs in China were at risk.
US commentators say the tone of the tweet is a dramatic shift for Mr Trump, who has consistently accused China of stealing US jobs.
The concession to Beijing comes ahead of high-level trade talks later this week in Washington aimed at resolving an escalating trade dispute between the world’s two largest economies.
The export ban was put in place after ZTE admitted in March 2017 to violating US sanctions by illegally shipping American technology to Iran and Korea and was fined $1.1bn (£0.8bn)
US companies provide at least a quarter of the components used in ZTE’s equipment, which includes smart phones and telecommunications network equipment.
ZTE spent more than $2.3bn on imports from about 200 US companies last year.
Douglas Jacobson, a lawyer in Washington DC who represents some of ZTE’s suppliers, said: “This is a fascinating development in a highly unusual case that has gone from a sanctions and export control case to a geopolitical one.
“There’s no legal mechanism for this. How this will play out remains to be seen. They are not simply going to be able to resume business as usual.”
Trump seeks to save Chinese jobs at ZTE ahead of trade talks