The Chinese government has rejected a call by Taiwanese President Chen Shui-bian for peace talks and warned against moves towards formal independence.
The two entities are locked in an arms race
Mr Chen used a speech on Sunday to urge Beijing to agree to talks to resolve tensions over the build-up of weapons between the two rivals.
But China has dismissed his "false overtures" and said his "separatist" plans risked a "great catastrophe".
Beijing has repeatedly pledged to invade if Taiwan declares independence.
"If Chen Shui-bian remains bent on sticking to his splittist and Taiwan independence activities, he will never bring peace and prosperity to the Taiwan compatriots, but will only bring great catastrophe," said China's Taiwan Affairs Office spokesman Zhang Mingqing on Wednesday.
"Taiwan independence is the biggest danger to peace and stability across the Taiwan Strait and the Asian region."
The BBC's Louisa Lim in Beijing says the statement underlines the lack of trust between the two sides.
In his speech, President Chen asserted the island of Taiwan was a sovereign nation.
Chen made conciliatory noises towards China
Tensions have been high since Mr Chen was re-elected to a second term in March.
The US state department welcomed Mr Chen's speech as constructive, prompting Beijing to ask America to stop sending the island the wrong message.
China has more than 600 ballistic missiles pointed at the island and is adding 60 to 70 new missiles each year.
Taiwan, which broke with the new Communist state in 1949, is locked in a debate over whether to strengthen its defences even further with US military aid.