The talks over the year-long trade row resumed nearly three months after the parleys collapsed in May with US President Donald Trump, who accused China of going back on the commitments it had made in previous 11 rounds of negotiations.
It is also the first meeting between the negotiators after Trump met his Chinese President Xi Jinping on the sidelines of the Osaka G20 summit on June 29 with the two leaders committing to resume the stalled talks.
In Shanghai, the talks were apparently being held in a low-key fashion without any formal announcements or media briefings, Efe news reported.
The deployment of security personnel outside the hotel where the US delegation is putting up signalled that the negotiations were under way.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are leading the American delegation. Chinese Vice-Premier Liu He and Trade Minister Zhong Shan, who did not take part in earlier rounds of negotiations, are heading the Chinese side, said the report.
In a statement issued last week, the White House had said that the "discussions will cover a range of issues, including intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, the trade deficit and enforcement".
The negotiations between the US and China were stalled in May after Trump alleged that China had reneged on its promises, and raised tariffs on $200 billion of Chinese goods from 10 per cent to 25 per cent, prompting Beijing to imposes tariffs on US goods worth $60 billion.
But an apparent breakthrough on the resumption of the talks was made when Trump and Xi met in Japan and agreed to a temporary truce in the trade war.
The US announced that it was holding off on imposing new tariffs on China and allowing its companies to sell products to Huawei after slapping an export ban on American companies from selling to the Chinese tech giant on security grounds.
Trump in Osaka also announced partially lifting of restrictions on sales to Huawei.
While additional tariffs have been taken off the table for now, the US is believed to maintain the duty imposed on a total of $250 billion in Chinese goods, while Beijing will continue to slap tariffs on US imports totalling $110 billion.
At the root of the trade dispute between the two largest economies is the US' trade deficit with China.
In 2018, Washington posted a trade deficit of $419 billion with Beijing largely due to the fact that US exports to Asia's largest economy totalled just $120 billion, while American imports from China reached $540 billion.
( With inputs from IANS )