China stepped up its economic war with Japan on Wednesday as a dispute between Asia’s two biggest economies intensified over a remark by Tokyo's new leader about a Japanese response to any Chinese military move against self-ruled Taiwan.

China, a permanent member of the United Nations Security Council, pushed back on Tuesday against Japan's bid for a permanent seat, saying its recent comments on Taiwan showed it is "totally unqualified".

Tension between Japan and China has escalated over the new Japanese leader's suggestion Tokyo could intervene militarily if Beijing attacks Taiwan.

Relations between the two neighbours have soured recently after Takaichi became the first sitting Japanese leader in decades to publicly link a Taiwan Strait crisis with the possible deployment of Japanese troops.

Withdrawal follows PM Takaichi’s Taiwan comments, prompting Beijing to issue warnings and cancel exchange events.

From China’s point of view, the Japanese Prime Minister’s remarks on Taiwan test a red line - a trigger that sets this dispute apart from past flare-ups, analysts say.

China's Premier Li Qiang has no plans to meet with the Japanese prime minister on the sidelines of the upcoming G20 summit in South Africa, the Chinese foreign ministry said on Monday, as tensions over Taiwan deepen.

China has intensified its economic pressure on Japan, with state-owned enterprises banning employees from travelling to its Asian neighbour, tour groups and a flagship forum being cancelled and Japanese film releases suspended.