U.S. business groups say they are encouraged by China’s approval of a new law that loosens restrictions on foreign investment and say it could help smooth the way to a substantive trade agreement between the two countries.

China’s ceremonial legislature passed a measure Thursday seeking to prevent Chinese officials from forcing U.S. and other foreign companies to turn over proprietary technology, a key sticking point in the trade fight between the two countries.

The U.S. has imposed tariffs on $250 billion worth of Chinese goods in an effort to force changes to a range of China’s economic policies.

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