The Matildas matched it in a thriller with world number two China before a record crowd of over ten thousand tonight in Round Two of the Pacific Cup, level at one-all after extra-time before going down in the penalty shootout 5-4.
In their first ever international at Olympic venue Sydney Football Stadium, the Matildas finished the game a player short, striker Alicia Ferguson sent off during extra-time for a dangerous tackle.
China's 1999 World Cup MVP Sun Wen gave the favourites an early lead inside three minutes, with a long-range swerving freekick.
But the spirited Matildas immediately shook off their nervous start and proceeded to take the game to the World Cup and Olympic silver medallists.
Thereafter, the Australians dominated possession, although found it hard to penetrate the disciplined Chinese backline. Claims for a freekick just outside the box were denied after Sharon Black seemed to be brought down as she ran toward goal. The Matildas again felt cheated in the last play before the break, a corner conversion attempt appearing to be handballed off the goal-line by a Chinese defender.
The Matildas came out firing in the second half, again restricting China to just one dangerous opportunity on goal. A quick counterattack caught the Aussie defence out of position, but the unmarked Zhao Lihong skied the open chance.
Matildas midfielder Kate McShea tried her luck with a thumping drive from 22 metres, only to see the strike fingertipped around the post by keeper Gao Hong.
The enthusiastic crowd was sent into raptures with Australia's equaliser with nine minutes remaining in normal time. A freekick from inside their own half was launched high by Cheryl Salisbury behind China's defensive line. Substitute Heather Garriock and China's Fan Yunjie raced for the ball, and with her marker still tight on her, Garriock managed to make a stunning left foot strike from an acute angle on the left, the ball flying low inside the far post.
With the tournament rules stipulating that a winner must be determined in each match, the game went into extra-time. Matildas keeper Tracey Wheeler pulled off two fantastic saves, one in each half of extra-time, denying a Lihong curler, before getting down to a low rocket from Shui Qingxia.
McShea and Garriock were not too far wide with Australia's only two golden goal attempts. Ferguson was mysteriously shown the red card in the first minute of the second half of extra-time.
The penalties tally remained even after the first three sets of kicks, Garriock, Alison Forman and Amy Wilson all successful for the Matildas. Defender Anissa Tann-Darby then hit straight at the keeper to give China the edge, and after teammate Salisbury then converted, Sun Wen was left to claim the winning penalty, the star making no mistake for a 5-4 shootout win to China.
The spirited performance however was as good as a win for the joyous Australians.
"I am just so proud of these girls," said Acting National Coach Ian Murray. "Tactically as a footballing team, there is none as good as China - they're so disciplined. At length we've been telling our players we really will have the footballing ability to compete against the top teams. We've now stepped over that next hurdle. We've come a very long way in these seven months - I can't believe how much they've taken in."