China got an early lead when Cui Qiuxia nudged the ball past goalkeeper Sally Rutherford after she had blocked a shot from a penalty corner but could not control the rebound.
The Black Sticks had five penalty corner chances but squandered the lot.
The killer blow came nine minutes from the end when Huang Ting reacted quickest to a loose ball close in to score.
Rutherford blocked a penalty stroke but otherwise most of the action was heading towards the Chinese goal where New Zealand captain Kayla Sharland, Anita Punt and Sophie Cocks had chances.
Next up New Zealand play hosts and new world No 1 Argentina, who were surprisingly held to a 1-1 draw by Australia in their first game yesterday. Hager knows improvements are needed and quickly.
"Our basic skills let us down. Now we just need to refocus on the next challenge," Hager said.
In Pool A, world champions the Netherlands belted Germany 6-0 while England, now ranked third, beat Korea 6-2.