Chinese women's national soccer team members line up for pictures before their 2008 Women's Asian Cup final match against DPR Korea held in Ho Chi Minh city, Vietnam, June 8, 2008. (Xinhua/Reuters Photo)

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.

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.

China's Bi Yan (No. 7) celebrates a goal with her teammates during their 2008 Women's Asian Cup final match against DPR Korea held in Ho Chi Minh city, Vietnam, June 8, 2008. (Xinhua/Reuters Photo)

"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.

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.

China's players celebrate a goal during their 2008 Women's Asian Cup final match against DPR Korea held in Ho Chi Minh city, Vietnam, June 8, 2008. (Xinhua/Reuters Photo)

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."