Bush is due to arrive in Shanghai on Thursday
The Washington Post newspaper cited US government officials, speaking on the eve of President Bush's departure for Shanghai.
It reported that the US government was considering resuming the sale of spare parts for the Black Hawk helicopters sold to China during the 1980s.
'No waiver'
But White House spokesman Ari Fleischer said the government was not considering a waiver of sanctions imposed after the 1989 Tiananmen Square crackdown against the pro-democracy movement.
The sanctions stopped the sale of spare parts for China's fleet of S-70C Black Hawk helicopters.
"The sanctions remain in place," Mr Fleischer said.
"There is no quid pro quo on assistance that China may be giving in our counter-terrorism efforts, intelligence or otherwise," he said in a statement.
Mr Bush is due to meet Chinese President Jiang Zemin on Friday, at the summit of the Asia Pacific Economic Cooperation meeting.
Intelligence swaps
The Washington Post quoted government officials as saying the White House was reconsidering the sanctions to promote exchanges of intelligence with Beijing.
Lifting the sanctions would help improve chilly relations between Washington and Beijing, the newspaper said.
The US administration had been considering lifting other sanctions imposed on 1 September because of Beijing's alleged transfer of missile technology to Pakistan, in violation of a November 2000 agreement.
But US-Sino talks have so far failed to resolve that dispute. The issue is the subject of intense debate within the Bush administration.
Relations strained
Already tense relations between the two countries were further strained by the collision between a US intelligence gathering aircraft and a Chinese fighter plane earlier this year.
Chinese Vice Foreign Minister Wang Guangya said in Shanghai that China had always opposed economic sanctions and called for the two sides to resolve their differences through dialogue.
"If the US is going to lift sanctions, it is a welcome move, " he told a news conference.
Our defence correspondent Jonathan Marcus says that ever since the terrorist attacks in the United States on 11 September, US foreign policy has had a new guiding principle.
He says this principle has already seen a warming of relations between Russia and the United States, and there are now hints ties between Washington and Beijing will also be affected.
China could play an important role in the current crisis: it is a permanent member of the UN Security Council; it has a short border with Afghanistan so it could probably provide useful intelligence; and, most importantly, it is one of Pakistan's closest allies.
While Beijing has declared the Chinese people stand with Americans in the fight against terrorism, there are still many sources of tension in the US-China relationship.
But given that many analysts still see China and the US as long-term strategic rivals, it is hard to say how far the new focus on a common struggle against terrorism will bring them together.