The arrest of sailor Zhan Qixiong and his crew "seriously infringed upon China's territorial sovereignty and violated the human rights of Chinese citizens", according to a statement by the country's foreign ministry.
All the fishermen have since been released. But rejecting the Japanese authorities' investigation into the incident as "unlawful and invalid", the ministry demanded that Japan apologise and offer compensation for its actions.
Japan's foreign ministry rejected the demand as "totally groundless".
"It cannot be accepted at all," said ministry spokesperson Satoru Sato.
The trawler's captain arrived back in China on Saturday morning, where he was greeted by cheering crowds.
"I support the position of the Chinese government: the Diaoyu islands belong to China, I have the right to fish there," Zhan said. "My arrest was illegal. I thank China, the party, and all those concerned with my fate."
Chinese media claims that the incident has caused lasting damage to the relationship between Japan and China.
State-owned news agency Xinhua reports that in addition to Beijing's protests, Chinese citizens have registered their protests online and by cancelling business and tourist trips to Japan.