The New Star, owned by a Hong Kong-based company, sank in the Sea of Japan 80 kilometers (50 miles) from the port of Nakhodka in the Primorye Territory during a storm on Sunday. Eight of the crew of 16 were saved.
Chinese media reported that the Sierra Leone-flagged New Star sank as a result of damage sustained, when the ship was fired upon by Russian border guards after the vessel left Nakhodka and crossed the Russian border without prior permission from the Russian authorities.
The ship had tried to deliver a consignment of rice to a Russian company who refused to accept the goods claiming it was "poor-quality" produce.
Two Russian border guard ships were sent to stop the vessel, but the captain ignored their orders.
Beijing urged Russia on Thursday to conduct a probe into the sinking of a Chinese cargo ship off Russia's Pacific Coast over the weekend that killed eight crewmembers.
The border guards fired warning shots, but when the vessel still refused to stop more direct shots were fired. According to video footage shown by Internet media in Vladivostok, Russian border guards fired a total of 515 shots at the vessel's bow. When this had no effect, they requested permission to open fire on the stern.
The Chinese ship owners have accused Russia of breaching international maritime law. The owners said in a letter that Russia's actions were not only "an awful violation of international law but also a cruel violation of human rights."
The owners also demanded that Russia provide compensation for the incident and requested that a joint Russian-Chinese government group be set up to investigate the sinking of the New Star.
The ship issued a distress signal when the vessel started to take on water during the storm on Sunday, and 16 crew members, all of them Indonesian or Chinese nationals, got into two lifeboats. Half of them were picked up by a Russian vessel, but an attempt to save the other eight sailors failed when they were washed out to sea.
An investigation into the incident has been launched by prosecutors in Russia's Far East.