Developers say the project will rival the Great Wall of China and revive tourism to historic Xinzheng city, Henan province.
But, in a survey of 50,000 people, 92% strongly opposed the project for "abusing the environment and wasting money".
More than 800 metres of the dragon, made of steel and cement, have already been completed, reports Henan Business News.
It snakes along the ridge of Shizu Mountain, which is believed to have been the residence of China's first emperor.
Li Xiong, president of the Zulong company behind the dragon, says it will cost more than £260 million and he hopes Chinese people all over the world will contribute.
"The finished dragon is to wear 5.6 million scales of jade or gold-coated bronze. People can pay to carve words on the scales, and inside the body there will be trains and clubs. It will be a place for cultural activities and relaxation," he said.
"I am not afraid of attacks. Our ancestors built the Great Wall, and now I am building the Great Dragon. I will succeed.'"
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