Ursula Perano

Secretary of State Mike Pompeo said in a speech to the National Governors Association Saturday that governors should be vigilant in their business interactions with China, warning that they're each being methodically analyzed and lobbied by the Communist Party, Politico reports.

Why it matters: Pompeo, who has helped shape the Trump administration's hawkish stance toward China, was seeking to highlight how competition with Beijing is not just a federal issue.

What he's saying: "When it comes to doing business, I’m asking you to adopt a cautious mindset," Pompeo said, according to Reuters. "In the words of President Reagan, when you are approached for introduction or a connection to a deal, ‘trust but verify.'"

• "[W]hether you are viewed by the [Communist Party of China] as friendly or hardline, know that it’s working you, know that it’s working the team around you," he added. "Competition with China is happening inside of your state, and it affects our capacity to perform America’s vital national security functions."

Between the lines: While phase one of a trade deal between the U.S. and China was signed in January, the two countries have still not resolved disputes over IP theft, spying and other broader issues.

• Just last month, prosecutors charged Charles Lieber, chair of the Harvard University chemistry department, with lying about funds he obtained through a Chinese government recruitment program.

Go deeper: The FBI is walking a tightrope on China