[Read more about an expanded Cfius.]

The decision will forestall more draconian curbs on Chinese investment that the White House had been considering, such as limiting investment in technology and manufacturing industries by declaring an economic emergency. That could help defuse tensions between the world’s two largest economies, at least somewhat.

But it is unlikely to avert a rapidly approaching trade clash that threatens to derail global stock markets and multinational supply chains. China is still far from offering to make the type of substantial changes to its economy that the Trump administration has pushed for, and no official talks appear to be scheduled in the next week.

The Trump administration is scheduled to put levies on $34 billion worth of Chinese products on July 6, with the president threatening to impose tariffs on as much as $450 billion of Chinese goods as punishment for Chinese trade practices. Beijing has countered with its own threat of tariffs on American products.

“Our objective is not to single out China or treat them differently, but that we have the necessary tools to protect U.S. investments,” Steven Mnuchin, the Treasury secretary, said Wednesday. “I’m not going to make specific comments on where we are in dialogue, but if China wants to come to the table with free and fair trade and treating American companies fairly and reducing the trade deficit, we’re always willing to listen.”

Additional curbs could still be coming. Administration officials said Wednesday that Mr. Trump would direct the heads of the Commerce Department and other federal agencies to review the nation’s export controls and recommend any needed changes. That could have a more significant effect on American companies than restrictions on Chinese investment, since it could limit their ability to sell products to China. The targeted industries that the White House wants to prevent China from dominating include robotics, artificial intelligence and new-energy vehicles.