Beijing Snacks near the Forbidden City gained unwanted attention putting up the sign, which also states dogs are not allowed inside.
Internet users have criticised the owner for being racist, with one commenter on the Vietnamese Tuoi Tre newspaper website stating: "It's not patriotism, it's stupid extremism."
The owner's sign is believed to be in part due to China's territorial disputes with Vietnam and the Philippines over the islands in the South China Sea and with Japan over the islands in the East China Sea.
The sign has not been taken down despite it going viral and being blasted on the internet.
Wang, who runs the restaurant, told AFP: "No officials have contacted me about it. This is my own conduct."