Japanese Prime Minister Shinzo Abe says the rocky relationship between Japan and China is comparable to that of Germany and Britain before World War One.
Speaking to reporters Wednesday at the World Economic Forum in Davos, Mr. Abe also referred to China's steady increases in military spending as a "provocation."
In a later keynote speech, Mr. Abe said Asian countries should be more forthcoming in order to avoid conflict.
"We must, ladies and gentlemen, restrain military expansion in Asia which could otherwise go unchecked. Military budget(s) should be completely transparent and there should be public disclosure in a form that can be verified."
Tokyo and Beijing have long shared a fraught past, but ties have been especially strained because of a worsening territorial dispute and mutual concerns over each other's military intentions.
Most analysts say strong economic ties make an outbreak of hostilities between the two countries unlikely.
But Prime Minister Abe pointed out close economic relations did not prevent Britain and Germany from going to war in 1914.
His spokesman, Yoshihide Suga, on Thursday denied the prime minister thinks war is inevitable between the two Asian powers.
"As you can see, Abe basically said things should not become like they were during World War One. I have no idea why it was misinterpreted in that way."
Chinese foreign ministry spokesman Qin Gang dismissed the comments, saying it would be better for Mr. Abe to "face up to what Japan did to China before the war and in recent history" than discuss Germany-Britain relations.
Qin also said it is Japanese, not Chinese, military motivations that should be questioned.
"It is Japan that should increase transparency. Japan should explain to Asian countries and the international community why it is attempting to rectify its pacifist constitution, and why it is trying so hard to expand and build up its military. What is its real objective?"
Ankit Panda, an associate editor at The Diplomat, tells VOA the outlook for improved China-Japan relations is poor, as the two countries have not held high-level diplomatic meetings for over a year.
"Even though economic ties between Japan and China are so high today, the possibility of conflict remains very real. What makes the Japan-China case even worse though than the pre-World War One era, is that (public) perceptions of China and Japan and Japan and China are very bad."
Many in China have become more critical of Japan since Mr. Abe took power in 2012, vowing to change Japan's pacifist, World War Two-era constitution and build a greater regional role for Japan's defense forces.
The moves come in response to what Japan and others in the region view as China's increasingly assertive military behavior.
Beijing last year set up an Air Defense Identification Zone in the East China Sea, where China and Japan both claim a series of uninhabited but strategic islands.
Japan, along with its ally the United States and South Korea, have rejected the ADIZ as a unilateral provocation, and say it has heightened regional tensions.
The islands, known in Japan as Senkaku and in China as Diaoyu, have been under Japanese control since 1971. But in recent months, a steady stream of Chinese patrol ships has attempted to change the status quo.
Beijing says tensions were only raised after Japan effectively nationalized some of the islands in 2012, buying them from their private Japanese landowner.
China also reacted furiously to Prime Minister Abe's recent visit to a Tokyo shrine that many Chinese view as a symbol of Japan's military past in Asia.
Mr. Abe on Wednesday defended his visit to the Yasukuni Shrine, saying he was honoring the souls millions of dead Japanese soldiers, and not just war criminals enshrined there.