The decision was made two days before the start of the tournament in Huangshi, Kyodo news agency reported.
The 19-year-old Ishikawa, who won her medal in the women's team event in London in August and was fourth in the singles, had been training in Beijing.
Japan Table Tennis Association general secretary Masahiro Maehara said they had been forced to withdraw her after hearing from their Chinese counterparts that her safety could not be guaranteed.
"Ishikawa was looking forward to playing so it really is disappointing but the Chinese association has told us it wants to maintain friendly relations with Japan in the future," Maehara told Kyodo.
China and Japan have a long-standing dispute over an uninhabited group of islands in the East China Sea - known as the Senkaku in Japan and Diaoyu in China.
The row escalated on Tuesday after two Japanese activists landed on one of the islands with Beijing describing the move as provocative. China lodged a complaint with Tokyo and said it reserved the right to take further action.
The move came on the highly-charged anniversary of Japan's occupation of its giant neighbour in 1931.
As anti-Japan protests flared across China, a Japanese cycling team were kicked out of a race in China with their participation in the Tour of Beijing in October also in doubt.
Also on Tuesday, China withdrew their badminton team from an event in Japan but refused to give a reason. One report said the cancellation was because the team were tired after competing in the Olympics, the Badminton Super League and the Masters Super Series.
The territorial dispute and four days of protests have led to Asia's two biggest economies suffering their poorest relations in decades.
Japanese businesses have shut hundreds of stores and factories across China, some sending workers back to Japan in fear that the protests would get out of hand.