In a rare joint message between MI5 and the FBI yesterday, officials warned business leaders to stay vigilant of the Chinese government stealing the IP of tech companies in the West. This highlights Washington’s continued focus on China as an ongoing challenge to the U.S.

The FBI warned businesses not to underestimate China. “The Chinese government is set on stealing your technology — whatever it is that makes your industry tick — and using it to undercut your business and dominate your market,” said Christopher Wray, the head of the FBI.

• The warning comes a day after the National Counterintelligence and Security Center warned of an aggressive campaign by China to influence U.S. state and local leaders. Wray called China’s influence a “massive shared challenge.”
• Liu Pengyu, a spokesperson for the Chinese embassy in Washington, told the Associated Press that China “firmly opposes and combats all forms of cyber-attacks” and said that the FBI's accusations were groundless.

The U.S. is trying to steer investor money away from China with these warnings, Protocol Policy reporter Hirsh Chitkara told me.

• But some investors aren’t taking this too seriously: VC firm Sequoia’s China arm just raised $9 billion for four new funds for health care and tech companies in the country.
• And some VCs, researchers and tech workers argue that claims such as those made by the FBI are clouded by xenophobia.

Investors have high hopes for China and consider our economies too intertwined to burn any critical bridges, Hirsh added. But not being skeptical of business relations could pose serious risks to U.S. investors. Remember what happened with DiDi and the Ant Group?

— Nat Rubio-Licht