The rule -- which comes as tensions have escalated over overlapping claims with the Philippines, Vietnam and other nations -- was called "provocative" by the US.
But it is largely identical to an existing measure from 2004, and reports said similar rules had also been declared in 1998 and 1993.
As well as the South China Sea dispute, Beijing is embroiled in a bitter row with Japan over small uninhabited islands in the East China Sea.
"We express dissatisfaction and opposition" to the US reaction, Chinese foreign ministry spokeswoman Hua Chunying said at a regular press briefing.
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"If someone insists on calling technical revisions to a local fishing regulation that has already been implemented for years a matter of regional tension, a threat to regional stability, then all I can say is, this is either a lack of basic common sense or some ulterior motive."
The measure took effect last week after being passed in November by China's southern island province of Hainan, and echoed previous rules making the same demand.
The rule applies to two million square kilometres of waters covered by Hainan, the official Xinhua news agency reported last month, without specifying the exact area or potential enforcement measures.
But that total area accounts for a large part of the South China Sea, portions of which are also claimed by the Philippines, Vietnam, Malaysia, Brunei and Taiwan.
The US State Department spokeswoman Jen Psaki yesterday called the move a "provocative and potentially dangerous act".
The Philippines' foreign department said in a statement today it was "gravely concerned" by the move.
China's declaration of an Air Defence Identification Zone (ADIZ) over an area covering the disputed islands triggered an international furore in November.