"I think we are improving," said Domenech who has faced heavy criticism ever since France went out in the first round of Euro 2008.
"We created a lot more chances than we did in our last two games," he told reporters. "I'm not saying it was perfect but it was better.
"Having lost will force us to be more careful, more inspired and to work harder."
The former world champions though, playing on the French Indian Ocean island of Reunion for the first time, did nothing to suggest they could make an impact at the June 11-July 11 finals in South Africa.
China, who did not qualify for the World Cup and are ranked 84th in the world, scored against the run of play in the 68th minute through midfielder Deng Zhuoxiang's 25-metre free kick.
France, who frustrated 10,000 enthusiastic, flag-waving fans packing the small stadium of the tropical island's second-largest city, now fly to South Africa where they will face the hosts, Mexico and Uruguay in Group A.
HENRY OMITTED
Like he had for the 2-1 warm-up win over Costa Rica and a 1-1 draw with Tunisia, Domenech left former captain Thierry Henry out of his team and opted for a 4-3-3 system instead of the usual 4-2-3-1.
France looked promising at first and centre-back William Gallas had a goal ruled offside on 13 minutes.
The hosts had most of the possession but created few clear chances until threatening with a low drive from the edge of the box by playmaker Yoann Gourcuff that keeper Zeng Cheng did well to save on 33 minutes.
A Gallas header then went narrowly wide before France stepped up a gear after the break, Gallas going close again with a header just over the bar.
France kept pushing for an equaliser in the closing stages and substitute Abou Diaby fired wide with a powerful, low shot from the edge of the area nine minutes from time.
Domenech's men play their first World Cup match against Uruguay on June 11 in Cape Town.
