However Wu found his range and rhythm in the second set and eventually ground down the gutsy Statham, winning 1-6 6-3 6-4 in just over two hours. Statham had Wu at 15-40 serving at 3-4 in the decider but was unable to make the crucial break with Wu saving three break points and then breaking Statham's serve in the very next game. The victory clinched the tie for China who go on to play India in April for a place in September's World Group qualifying round.
For New Zealand, it's a massive disappointment after believing they had a strong chance of winning the tie.
But things went surprisingly wrong from the start of the doubles. The Chinese opted to replace Xin Gao with their top singles player Ze Zhang and it proved a masterstroke.
Zhang was the best player on the court as he teamed with Gong to defeat the experienced Kiwi combination of Daniell and Sitak, 6-4, 6-4.
Daniell and Sitak were guilty of serving a staggering 10 double faults between them and had a first serve percentage of just 56 per cent compared to 74 per cent for their opponents.
Zhang and Gong were able to convert two of their four break point chances while Daniell and Sitak only managed one break point off the Chinese players serves in the entire match.
New Zealand captain Alistair Hunt was disappointed at missing a rare opportunity for a notable win.
"With Davis Cup anything can happen out there, you don't know what the other team is going to do, they played really well today and our guys didn't play their best," Hunt told Radio Sports' Lucy Thomson.
"The boys had a tough doubles – it's been an incredible record of not losing in doubles for about four years basically in the Davis Cup. At some stage [a loss] was always going to happen and unfortunately it happened today."
Hunt noted that the shortened three-set format didn't allow as much time to adjust, which proved problematic for the slow-starting doubles pairing.
"When it's one-off matches like this and especially with the shortened format, if we're not starting quick enough then we're going to struggle and that's what happened today."
The defeat will see New Zealand face a trip to South Korea later this year for a relegation tie with the Koreans going down to Pakistan 3-0 in Islamabad.
It will be a daunting task, especially if Korea is able to call on their new superstar, Australian Open semifinalist Hyeon Chung.