Hard-right politician Jose Antonio Kast is set to be inaugurated as president of Chile on March 11 after defeating Jeannette Jara, a communist, in December's presidential run-off.
On Tuesday, he met with the incumbent Gabriel Boric to coordinate the transfer of power.
But Kast terminated the meeting abruptly after accusing Boric of withholding information about the submarine cable project.
The China Mobile multinational wireless provider has proposed to lay a cable between Hong Kong and the Chilean port of Valparaiso in a bid to expand Pacific connectivity and data capacity.
China's connectivity currently relies almost entirely on cables running through archrival, the United States.
The US government argues that the project undermines regional security, which Chile denies.
Last month, Washington revoked the visas of three Chilean officials, including Boric's minister of transport and telecommunications -- a rare rebuke by the United States of one of its closest South American allies.
President Donald Trump is locked in a fierce battle for influence with China in Latin America, which his administration refers to as part of "our hemisphere."
Boric said that his meeting with Kast ended in acrimony after Kast demanded Boric retract his claim that he had informed his successor about the cable project.
Boric claims he told Kast on February 18 that he had received threats from the United States regarding the project, which has yet to be approved by Chilean authorities.
Kast said he suspended cooperation with Boric on the transition because he did not trust the information provided by the outgoing government.
Like Trump, Kast won the election on a promise of mass migrant deportations.
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