Huang Zerong was arrested last year after he wrote a critical essay in his self-published magazine.
Huang's lawyer said the Sichuan court - 1,800 km (1,100 miles) from his home in Beijing - had no jurisdiction.
A supporter outside the court said the trial was "a violation of free speech".
"Obviously, this case doesn't revolve around illegal business activity," Chen Yunfei told Reuters.
The allegations related to his magazine, Small Scars from the Past, which printed stories of political persecution.
Huang's lawyer, Liu Xiaoyuan, told the AFP news agency that case was "inherently flawed".
"If they're going after him for 'conducting an illegal business', everything he's published has been in Beijing. So why is he being tried by a court in Sichuan?"
Huang, also known by his pen-name Tie Liu, spent more than 20 years in prison camps in his youth for being a "rightist" during Mao Zedong's crackdown on liberals.
The Communist Party eventually cleared his name in 1980.
His wife said at the time of his arrest last year that she believed he was targeted because of his article criticising Liu Yunshan for restrictions on media freedom.
He was initially charged with "picking quarrels and provoking trouble" but that was later dropped.
Chinese authorities have mounted a widespread crackdown on dissenters in recent years.
Dozens of activists and government critics are said to have been targeted, with many detained, and some prosecuted on broad public order charges.
An 81-year-old Chinese writer has been given a suspended jail term of two and a half years for "running an illegal business", after he criticised propaganda chief Liu Yunshan.