"Whenever the Chinese say, 'We're creating more space in our market for you to operate in,' there is still a long list of things you are not allowed to do."

In addition to confirming already announced pledges to remove ownership limits on insurance companies and auto makers within the next three to five years, China is also easing or removing ownership caps on businesses including ship and aircraft manufacturing, power grids and new breeding of crops other than wheat and corn.

China first indicated in April that it would roll back a number of the foreign investment restrictions by the end of this year.

The changes announced Thursday include an earlier pledge to allow 51 percent foreign ownership of brokerages and life insurers, and to lift that cap entirely by 2021. Current rules limiting a single foreign financial institution’s stake in a Chinese commercial bank to 20 percent will also be abolished on July 28. The rule that investment by multiple overseas financial institutions in Chinese commercial banks must not exceed 25 percent will also be lifted.

“We expect China to really let some big foreign financial companies to come in to open branches, in areas such as securities, life insurance, funds,” said Xu Weihong, chief economist at AVIC Securities. “China may not let them all in at once, but we expect it to want to showcase a few success examples.”

Limits on foreign ownership of passenger car manufacturing companies will be lifted by 2022, a change that was already announced. Restrictions on power grids, passenger railway transport and shipping companies will also be lifted.

The timing of the announcement could signal that Beijing wants to avoid further escalation of the ongoing trade dispute with the U.S. But it’s not clear how far Thursday’s announcement will go in placating the Trump administration.

“I think they’re very confused about what the United States wants from them,” said Wendy Cutler, former acting deputy U.S. Trade Representative. “Our positions seem to change week by week in terms of what we’re asking them.”

China has long insisted that it will reform its economy and open its markets to outsiders at its own pace. So while Thursday’s announcement easing restrictions on foreign investors could help firms in those sectors tap new Chinese markets, the choice of sectors likely reflects areas where China wants and needs greater investment, according to Scissors.

"If you can come in here with a hybrid seed that does better in Chinese soil, we love you,” he said. “Until that business is established, and we’ll take it away from you."

— Reuters contributed to this report.