The 33-year-old, who claimed his 19th Grand Slam title at this year's US Open, said that he had not had enough time to practise sufficiently due to inflammation in his left wrist.
Nadal, a two-time finalist in Shanghai (2009 and 2017), was looking to build upon his 11-match winning streak.
Rafael Nadal has pulled out of the Shanghai Masters
Image credit: Getty Images
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However, his withdrawal will improve rival Novak Djokovic’s chances of finishing as the year-end World No 1.
"I am very sad to announce that I won't be able to play in Shanghai this year,” Nadal said in a statement.
“It is the second year in a row and in China I have great fans.
"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."
Nadal’s withdrawal will deny fans the chance to witness the reunion of the Big Four of men's tennis next week, with Roger Federer, Novak Djokovic and Andy Murray all scheduled to feature.
Nadal is next scheduled to take part at the Rolex Paris Masters.
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