The Chinese favourites, who included the world's top three singles players, won 3-0 overall in a scoreline which belied the hosts' brave performances.
Distraught star Sung Ji-Hyun could not contain her grief after losing to top seed Li Xuerui in a 2-1 duel, having never taken a single game off the world number one in their seven previous meetings.
"I was in the very first game (of the evening) for the team and I'm very sorry to my teammates," cried Sung. "I should have been more confident." (Squash: Pallikal Settles for Bronze | Ghosal Creates History)
The 23-year-old world number four fought to a brilliant lead in the opening match, taking the first game 21-17 with epic rallies stirring up a cheering home crowd as an unsettled Li put shots long and wide.
Sung tired in the second set, losing 21-13 before rallying once more in the third, going into the break just a point down. (Read: Indian Men's Football Team Ousted)
But Li's artillery of shots and lightning quick returns finally broke over-stretched Sung who yielded 21-16 in the 65-minute tussle.
Sixth-ranked Bae Yeon-Ju also managed to take the first game off world number two Wang Shixian but with a deafening crowd chanting her name as she tried to seal victory in the third, she agonisingly lost it 21-19.
Doubles pair Kim So-Yeong and Chang Ye-Na took their first game against Zhao Yunlei and Tian Qing in the second match, but none of the Korean challengers could convert their leads into victories.
- Chen downs Lee -
The hosts will again challenge China for gold in the men's team final on Tuesday, after world champion Chen Long smashed Malaysian world number one Lee Chong Wei in the semi-final.
South Korea eased through to the final dispatching Taiwan 3-0.
Malaysia faced a difficult task in their clash with a strong China team, which featured 25-year-old world number two Chen and superstar Lin Dan.
Chen beat Lee to gold in this year's world championships and made a confident start, taking the first game, before Lee battled back in the second with both players putting on an amazing display of powerful smashes and deft net skill.
But the 31-year-old Malaysian seemed to lose confidence and concentration in the third and, despite a few flashes of brilliance, lost 21-11.
Lin saw off Malaysia's Chong Wei Feng in two sets as China romped to a 3-0 overall win.
Lee's performance does not bode well for the singles competition in which he may have to beat his nemesis Lin as well as Chen to win his first Asian Games title.
Fans are hoping for another classic showdown between Lee and Lin, who are drawn to meet in the semi-finals, in what is the Malaysian's Asian Games swansong.
Lin, 30, has repeatedly denied the Malaysian gold in major tournaments, including the Asian Games, Olympics and worlds.
Chen is the clear favourite in the other half of the draw, with Indonesia's Tommy Sugiarto and South Korea's Son Wan-Ho his biggest challengers.
South Korea's Son is one to watch for an upset though, having pulled out some inspired performances in the men's team event in Incheon.