BEIJING/SHANGHAI (Reuters) - Qualcomm’s proposed $44 billion takeover of rival NXP Semiconductors is yet to see a concrete breakthrough in China, sources said, tempering hopes a lull in trade tensions with the United States had prompted Beijing to speed up its ruling on the deal.

FILE PHOTO: A booth of U.S. chipmaker Qualcomm is pictured at an expo in Beijing, China, September 27, 2017. Picture taken September 27, 2017. REUTERS/Stringer/File Photo

China’s approval would likely depend on the progress of broader trade discussions, three people with knowledge of the deal said, as senior Chinese and U.S. officials meet this week in Washington for their second round of high-stake talks.

They made little apparent progress in discussions in Beijing earlier this month. The U.S. ambassador to China said on Tuesday the two countries were still “very far apart” on resolving trade frictions.

Washington and Beijing have proposed tens of billions of dollars in tariffs in recent weeks, fanning worries of a full-blown trade war that could hurt global supply chains and dent business investment plans.

Qualcomm’s takeover of NXP has been caught in the crosshairs of the trade tensions. The deal has received approval from eight of the nine required global regulators, with Chinese clearance the only one pending.

NXP shares jumped on Monday after a media report said China had resumed its review of the deal and that the commerce ministry had been asked to speed up the process.

This followed President Donald Trump’s pledge on Sunday to help China’s ZTE Corp get “back into business” after a U.S. ban hurt the telecom equipment maker, signaling a thaw in trade relations.

However, two sources told Reuters there had been no outward change in the review process that has been ongoing since Qualcomm refiled its application for the deal in April.

There has been no clear new signs since Sunday pointing to an imminent approval of the deal, one of the sources said.

The second source, who is familiar with Qualcomm’s dealings with Chinese regulators, said the State Administration for Market Regulation (SAMR) had not provided the company with any updates on the review.

The Ministry of Commerce and SAMR did not have an immediate comment when contacted by Reuters on Tuesday. Qualcomm did not respond to requests for comment.

BROADER TALKS IN FOCUS

China is unlikely to approve the deal while broader trade talks and discussion around ZTE are still in the balance, but it could quickly give the go-ahead at the “right political moment”, antitrust lawyers and people close to Qualcomm said.

“Because of the current trade tensions and the ZTE incident they are just waiting for the right timing to do it,” said one Beijing-based antitrust lawyer, who asked not to be named because he was not authorized to speak about the matter.

He added that Chinese regulators had already been looking at the case for a “very long time” and had identified remedies that Qualcomm needed to implement to resolve competition issues and push the deal through.

“From a procedural perspective, (the Chinese regulators) could clear the case even tomorrow or this week,” he said.

Clinching the deal is key for Qualcomm, which is looking to diversify its customer base and become the leading chip supplier to the fast-growing automotive market.

The sharp change in Trump’s stance on ZTE has fueled optimism about the prospects of the deal, sources said.

“This is the first positive indicator I’ve seen for some time,” said a third U.S.-based technology industry executive with knowledge of the deal.

“For suppliers to ZTE - including Qualcomm, Google, Intel and InterDigital - positive engagement is a good outcome.”