The 33-year-old Majorcan, who claimed his 19th Grand Slam title at this year's U.S. Open, said that he had not had enough time to practise sufficiently due to inflammation in his left wrist.
"I am very sad to announce that I won't be able to play in Shanghai this year. It is the second year in a row and in China I have great fans," Nadal said in a statement.
"But, as you all probably know, I had an inflammation on my left wrist during the Laver Cup and I haven't had the time to recover and practice to be ready... I hope to be back in Shanghai for the 2020 tournament."
Two-times finalist Nadal's withdrawal denies fans the chance to witness the reunion of the Big Four of men's tennis at the 6-13 October tournament, with Roger Federer, Novak Djokovic and Andy Murray all scheduled to feature.
It also hands Djokovic the advantage in the battle to seal the year-end number one ranking.
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