With each passing day, China's reaction over last week's incident between a Chinese trawler and Japan Coast Guard vessels in the East China Sea appears to be escalating.

Diplomatic tension has increased with the cancellation of a senior legislator's visit to Japan this week as well as postponing bilateral talks aimed at signing a treaty over joint gas field development in the East China Sea.

And now, the situation has reached a point where it looks like Prime Minister Naoto Kan and Chinese Premier Wen Jiabao will not be holding a bilateral meeting in New York, where both leaders are expected to attend the United Nations General Assembly, Chief Cabinet Secretary Yoshito Sengoku said Thursday.