The Prime Minister also refused to rule out sending more arms to Taiwan. Mr Sunak is not expected to meet Chinese president Xi Jinping while attending the G20 summit.
He told reporters that Beijing “poses a systemic challenge to our values and interests”.
“China is undoubtedly the biggest state-based threat to our economic security,” he said. ‘I think that view, by the way, is highly aligned with our allies.”
But he said China must not be frozen out of talks on global problems.
“China is an indisputable fact of the global economy and we’re not going to be able to resolve shared global challenges like climate change, or public health, or indeed actually dealing with Russia and Ukraine, without having a dialogue with them,” he added.
Asked whether he thought Britain should learn lessons from Ukraine by arming Taiwan now in case of a threat later, Mr Sunak said: “We’re looking at all of these policies as part of our refresh of the integrated review.
“Our policy on Taiwan is obviously there should be no unilateral change to the status and there should be a peaceful resolution to that situation. We stand ready to support Taiwan as we do in standing up to Chinese aggression.”
Taiwan is an independent country with its own democratically-elected leaders but Beijing views it as a breakaway province.
President Xi has said “reunification” with Taiwan “must be fulfilled”.