China has denied payment of ransom for the release of a Chinese woman abducted by the suspected, Abu Sayyaf Group, from a Sabah resort last week.

Malaysian authorities said the abductors demanded 70 million Yuan or roughly US $113 million for the release of the Chinese tourist last week, but the Chinese Embassy in Malaysia denied receiving a ransom note so far.

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Philippines authorities believe that the Abu Sayyaf took their victim, Gao Huayuan, and Filipino resort employee, Marcy Dayawan, to an island off Tawi Tawi, and demanded ransom from the Malaysian authorities.

The Malaysian Minister said they have deployed a team of Malaysian police and negotiators to work on the reduction of the ransom money.

Reports said the Abu Sayyaf made contact through telephone with the family of Gao Huayuan demanding ransom.

No ransom note has been sent to the family of Filipino Marcy Dayawan.

Malaysian Minister Ahmad Zahid was quoted as saying that the Malaysian government is working on the kidnapping case together with the Philippine authorities.

"We have sent our team, the police and the negotiators ... to negotiate about the reduction of the ransom," he said.

Sabah is home to beautiful resorts frequented by foreigners but unfortunately, the place is also teeming with Muslim militants and kidnap groups, one of them being the notorious Abu Sayyaf who have been known to decapitate their victims.

Malaysian police said the kidnappers wore masks and swooped down on the resort armed with high-powered firearms, grabbed the two women and fled using a speedboat.

Kidnap-for-ransom incidents are high in these places, and payment of ransom is usually done by the victim's families.