Nehwal was blown away in 40 minutes as the seventh seeded Chinese cruised away to a 13-21, 21-23 victory at the National Indoor Arena.
Ranked four in the world, Nehwal failed to gain any momentum with most of her shots landing at the net. She could not get used to the drift, making errors against a more aggressive Xuerui. The Chinese notched up a 2-0 lead, going into the break at 11-8.
There was no respite for Nehwal after the break either with Xuerui winning seven straight points to build a huge lead, which the Hyderabadi found impossible to cover.