China lost its Women's Asian Cup final against the Democratic People's Republic of Korea (DPRK) on Sunday, but the match may be a positive sign of things to come.

North Korea's Sonu Kyong-sun (L) and China's Xu Yuan fight for the ball during the AFC Women's Asian Cup 2008 final soccer match in Ho Chi Minh City June 8, 2008. [Agencies]

Despite its 2-1 defeat, China appeared stronger and more confident than it has in a long time, strengthening its chances of achieving its Olympic goal of reaching the semifinals in Beijing.

"We showed remarkable progress during this tournament. It's encouraging to our Olympic preparations," head coach Shang Ruihua said. "We gained a lot from the wins and losses."

China, a former World Cup and Olympic finalist, has struggled in recent years. It entered the Asian Cup as one of the least favored squads.

China's midfielder Bi Yan jubilates after scoring the first goal during the AFC Women's Asian Cup final between DPR Korea and China in Ho Chi Minh city on Sunday. China lost 2-1. AFP But the team played unexpectedly well on its road to the final. It stumbled to a 1-0 win over minnow Vietnam in the opening match, but bounced back strongly in the next game to crush Thailand 5-1.

The team lost to DPRK 1-0 in the third group match but advanced to the semifinals where it faced title favorite Japan, a team China had not beaten for four years. But China's impressive all-around performance helped it turn a 1-0 deficit into a 3-1 upset over Japan, setting up the final match against DPRK.

"Once again, we played good team soccer," the coach said about the final match, a game China led 1-0 going into the second half. "All of our players kept fighting for every ball whether we were ahead or behind.

"We also figured out how to better control the ball, to make low and short passes as much as possible."

The 63-year-old coach, who took the reins after Frenchwoman Elisabeth Loisel was sacked in March, also said he has learned a lot about the team from its Asian Cup performance.

"The Asian Cup is a major international event and also the best tune-up for us before the Games. From these matches, I know more about my players, especially those who have not competed in a big tournament before."

The team's signs of improvement also pleased some of China's stars of the past such as Sun Wen, who led China to runner-up finishes at the 1996 Atlanta Olympics and the 1999 World Cup.

"I am so glad that we are right back on track again," Sun wrote on her Sohu.com blog. "We are stepping forward in the right direction and I am sure China women's soccer will have a strong future."

Sun's former teammate Liu Ailin echoed Sun's comments on her own blog, saying her younger compatriots were playing with more confidence.

"We lost many matches before and that made players fearful and hesitant on the pitch," Liu said.

"But in this tournament they showed courage to control the ball, penetrate the defense and push forward. Confidence and courage are very important when playing against stronger teams."

The downward spiral

Since the golden years of the 1990s, China's women's team has been in a downward spiral, dropping to 14th in the latest FIFA rankings, its lowest ranking ever.

Meanwhile, Asian neighbors DPRK and Japan have leapfrogged the former Asian No 1 and are now ranked No 6 and 10, respectively.

Since conceding the Asian Cup title to DPRK in 2001, China's "Steel Roses" have underperformed in continental competitions. They fell to the Koreans again in 2003 before recapturing the Asian Cup title in 2006 with a penalty shootout victory over host Australia in the final.

Three months ago, China finished third behind Japan and DPRK in the EAFF Championship followed by three consecutive losses in the Algarve Cup.

During his two months in charge, Shang has molded the dispirited side back into a competitive team.

The core of the team is experienced - captain Li Jie shores up the defense, Bi Yan takes care of the midfield and Han Duan spearheads the attack. Some young talents have also been injected into the team.

Standing out among these up-and-comers is 23-year-old striker Xu Yuan, who scored the only goal in China's opening game against host Vietnam, and found the net again in her team's subsequent demolition of Thailand.

Besides Xu, a pair of teenagers also broke onto the team, with Gu Yasha and Lou Jiahui both supporting the attack from midfield. Lou came close to scoring her first international goal against Vietnam, while Gu also impressed in the match against Thailand.

"Now, I have more confidence to achieve the goal in the Beijing Olympic Games," Shang said. China has been drawn alongside Canada, Argentina, and Sweden in the Olympics.

FIFA.com contributed to the story