Japanese media says the electronics producer Canon is suspending all its operations in China, apparently in response to the series of violent anti-Japan protests across China over the weekend.
As the territorial dispute escalates over a chain of islands in the East China Sea, Chinese warships have been conducting live ammunition drills there.
The continued protests prompted Yoshihiko Noda, Japan's prime minister, on Sunday to call on China's government to protect his country's companies and diplomatic buildings.
Al Jazeera's Marga Ortigas, reporting from Hong Kong, said that Chinese protesters were attacking anything with links to Japan. "Now it is spreading to more and more Chinese cities," she said.
Police fired tear gas and used water cannon to repel thousands of protesters occupying a street in the southern city of Shenzhen, near Hong Kong.Japanese flags burned
With some people holding a banner calling for a "bloodbath" in Tokyo, Shenzhen protesters clashed with riot police, who fired tear gas to disperse the crowd, Hong Kong broadcaster Cable TV showed.
It also showed footage of more than 1,000 protesters burning Japanese flags in nearby Guangzhou and storming a hotel next to the Japanese consulate. Chinese state media reported a turnout of more than 10,000 in the city.
Demonstrators looted shops, attacked Japanese cars and broke into a dozen Japanese-run factories in the eastern city of Qingdao, according to the Japanese broadcaster NHK.
"Regrettably, this is a problem concerning the safety of Japanese nationals and Japan-affiliated companies," PM Noda told a talk show on NHK.
The protests first erupted in Beijing and other cities on Saturday, when demonstrators besieged the Japanese embassy, hurling rocks, eggs and bottles, and testing cordons of anti-riot police.
Thousands of people continued protesting in Beijing on Sunday.
Sino-Japanese ties have long been plagued by China's bitter memories of Japan's military aggression in the 1930s and 1940s and present rivalry over resources and regional clout.
Relations between the two countries, whose business and trade ties have blossomed in recent years, chilled in 2010, after Japan arrested a Chinese trawler captain whose boat collided with Japanese Coast Guard vessels near the islands of Senkaku, called Diaoyu in China.