He is barking through fear. it is a stress call. Our chinchilla does it if the dog goes near the cage. I've have handled alot of young chinchillas since i use to work at a pet store as a consultant and supervisor, and have experience with biting and fear aggression.
Coax with treats and get it to come to you through food. This is going to take time. Eventually you should be able to get the chinchilla to come and sit on your lap. Do not try to grab it you will just encourage more fear.