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Chinese stocks fell on Wednesday as the world's two largest countries are expected to sign a phase one trade deal later in the day.

The Shanghai Composite Index was down 0.54 percent to 3,090.04 at close, while the smaller Shenzhen Composite Index shrank by 0.15 percent. The NASDAQ-style ChiNext rose 0.09 percent.

Shares across most of Asia declined on Wednesday following reports saying some tariffs on China will remain in place until after November, and that the Trump administration is drafting rules allowing the blockage of more sales to Chinese technology firm Huawei.

US President Donald Trump will sign the phase one trade deal with Chinese Vice Premier Liu He at the White House on Wednesday at 11:30 am (00:30 on Thursday, Beijing time), according to Reuters.

Li Daxiao, chief economist at the Shenzhen-based Yingda Securities, told the Global Times on Wednesday that the fluctuation of A shares that day was normal given their prior significant increase.

In the previous session on Tuesday, the CSI300 touched a near two-year high following the announcement that the US Treasury had withdrawn its designation of China as a currency manipulator.

"The market is expected to climb at Thursday's open, following the signature of the trade deal," Li noted.

For the full year of 2020, Li forecast that the A-share market will remain bullish thanks to trade returning to normalcy, the yuan's strengthening and the continuous inflow of foreign capital.