Barring the late blunder, the Indian eves matched their fancied rivals stick for stick in the entire 60 minutes to raise hopes of an upset result.
But it was not to be as the world no. 5 China scored a late winner through Yudiao Zhao, much to their relief.
China enjoyed the early share of exchanges but world no. 13 India stated to get their footing in the match towards the end of the first 15 minute quarter.
But the Indians did not sit back and restored parity four minutes later from a penalty stroke which was perfectly converted by Jaspreet Kaur.
With both teams locked at 1-1 at half time, the third quarter was expected to be a lively affair and it was India who got the first scoring opportunity in the form of a penalty corner, which they failed to utilise.
The tussle between the two teams continued in the fourth and final quarter.
The Indians, in fact, had a chance to register an upset win when they earned their third penalty corner with five and half minutes remaining in the match, but Jaspreet's effort went over the Chinese goal.
Just when it seemed the match was heading for a draw, which in fact would have been a just result, Zhao caught the Indian defence off guard and scored the winner in the 59th minute with a rasping shot from top of the circle.
With two wins in as many games, China have moved to the top of Pool A, while India are in second position.
India will play Malaysia in their final pool match on Friday, while China will take on lowly Thailand.