The 19-year-old Wang Zhiyi outclassed World no. 9 Saina Nehwal in a first-round match in Auckland on Wednesday.
In the last edition at Gold Coast, Australia, India had reached the quarterfinals and have been seeded eighth in this edition.
Saina Nehwal was knocked out after losing 13-21, 23-21, 16-21 against third seed Akane Yamaguchi of Japan in her women's singles quarterfinal.
PV Sindhu, Saina Nehwal and Sameer Verma won their Round of 16 matches in straight sets.
PV Sindhu cruised through her opponent while Saina Nehwal and Sameer Verma had to work extra hard for their wins.
India's Saina Nehwal lost 8-21, 13-21 to Nozomi Okuhara of Japan in the Singapore Open quarterfinals.
PV Sindhu took just 39 minutes to record a 21-13, 21-19 win over the world number 22.
PV Sindhu defeated Indonesia's Lyanny Alessandra Mainaky 21-9, 21-7 in 27 minutes to sail into the second round.
In the other matches of the day, PV Sindhu and Kidambi Srikanth registered victories in straight games, going through to the round of 16.
Age-fudging has been a big problem in Indian sports with some associations handing out bans on players found guilty.
Saina Nehwal was forced to withdraw from Swiss Open last week and was admitted to hospital for treatment.
Last week, Saina Nehwal said she was admitted to a hospital after being diagnosed with acute gastroenteritis with mild pancreatitis.
Saina Nehwal went down 15-21, 19-21 in the 37-minute match against World No.1 Tai Tzu Ying of Taiwan in the quarters of All England Championship.
All England Open: Saina Nehwal knocked out after losing to World No.1 Tai Tzu Ying in straight games.
Saina Nehwal defeated Line Kjaersfeldt 8-21, 21-16, 21-13 in women's singles second round.
Kidambi Srikanth outclassed his French counterpart Brice Leverdez 21-13, 21-11 in straight games.
PV Sindhu would be the biggest draw for India in this premier badminton tournament.