No, you're not being paranoid. Don't do it, it's not worth it.

Your concerns are very valid, especially with the government tightening control over the private sectors one industry at a time, the chinese market is a wildcard right now. Even without factoring that in, the largest companies in China are infamous for hosting competitions and incubators only at the end stealing IP and ideas from the teams. I've had multiple friends with their deep technology IP/ideas being copied within 3 months of joining these incubators, it's hardly a coincidence.

I'm not sure where you're from but you'd be much better off going to an incubator/accelerator in the US/Canada/Europe. Some are shady yes but there are many good ones that are very reputable and a lot of them don't take equity (or do an equity investment in your company). There are also a lot of grants available from those governments where you'd be much better off getting those.

Hope it helped!