The approval of the locally-developed rice shifted the global balance of power in food trade and prompted other countries to follow suit, experts said.
Greenpeace called the move a "dangerous genetic experiment" and said it had previously exposed illegal cases of GM rice in China.
"If the Ministry of Agriculture cannot even control the illegal cultivation of GM rice, how can they manage the risks of large scale cultivation?" Lorena Luo, Greenpeace's food and agriculture campaigner in China, asked in an emailed statement.
China leads the pack in GM rice breeding research for new, insect resistant cultivars.
The first GM food crop containing human genes is also set to be approved for commercial production.
The laboratory-created rice produces some of the human proteins found in breast milk and saliva.
The rice is a major step in so-called Frankenstein Foods, the first mingling of human-origin genes and those from plants. But the U.S. Department of Agriculture has already signalled it plans to allow commercial cultivation.
Referring to something it "discovered" four years previously, the environmental pressure group issued a press release at the end of August revealing that a team of scientists from the United States had "fed a group of 24 children aged between six and eight years of age a potentially dangerous product" in Hunan Province, China. It encouraged readers to be "pretty outraged".
It might be the case that the Hunan researchers cut some corners, as Greenpeace alleges, and a Tufts University ethics committee is currently looking into that.
Indeed, authorities in the country have approved Bt rice, a locally developed strain of engineered rice, although it is not yet in production.
But the country has reacted heavy-handedly since Greenpeace's "findings", not least due to the ensuing public outcry. Rumours shot across the Internet, through the Chinese social media site Weibo, claiming that the rice would make the children impotent in later life. Naturally, those villagers whose children were involved in the trial were outraged, as one would expect them to be as they lacked the benefit of informed judgement.
The Chinese media claimed that the research was part of a scurrilous conspiracy between the American government and local scientists to carry out a secretive experiment on its country's unwitting children.
The three Chinese scientists implicated by Greenpeace paid for their involvement by forfeiting their jobs. However, both the American and Chinese researchers continue to assert that all studies were transparent, and claim they informed all parents involved that their children would be eating nutritionally enhanced rice.
And here is the bone of contention. While the parents do not deny the scientists' assertions, their outrage stems from the terminology: that the "nutritionally enhanced" rice was never referred to as "genetically modified".
Greenpeace has made no bones about its opposition to modification, even as a means to secure food supplies and enhance the meagre produce available to the poorest and most deprived.
Greenpeace said: "We're... seeing a huge amount of time, energy and talent being wasted on what is essentially yet another example of big business hustling in of one the world's most sacred things: our food supply."
Marco Torres is a research specialist, writer and consumer advocate for healthy lifestyles. He holds degrees in Public Health and Environmental Science and is a professional speaker on topics such as disease prevention, environmental toxins and health policy.