Another fall from American team leader Sacramone on the floor exercises cost the team its chance to get back on top in the last round.
With deafening cheers and applause from home fans, Cheng sealed China's victory with a powerful routine to the famous local song The Yellow River.
"It was a great duel between the two teams," said the 20-year-old Cheng, the most senior member of the team. "Before the competition, I told myself, no matter who wins, it will be a great match. I'm very happy that we are the winner finally."
United States' Alicia Sacramone competes on the balance beam during the women's team final of the artistic gymnastics event of the Beijing 2008 Olympic Games in Beijing on August 13, 2008. [Agencies]
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The US team was hampered by injuries suffered before the finals, when Samantha Peszek sprained her left ankle in the warm-up and Chellsie Memmel also injured an ankle in training.
"Our team did a very good job today and I'm very happy that they all tried 100 percent," said Qiao Liang, the US' China-born coach. "We can't blame our athletes for mistakes since making mistakes is a normal thing. The Chinese team performed at the highest level today."
US star Johnson echoed her coach's satisfaction.
"I honestly think our team did great," said the hot favorite for the women's all-around finals tomorrow. "We have overcome so many obstacles and I can't point out one particular gymnast that we are disappointed with.
"We are more than happy to represent the US, winning a silver. We respect China for what they've done. They had a great day today."
Sacramone succumbs to rare case of jitters
Gymnast Alicia Sacramone admitted she had let nerves get to her after falling on the beam, which made her botch her floor routine and destroy the US' chances of winning gold in the women's Olympic team final yesterday.
The 20-year-old lost her footing when mounting the beam with a somersault from the springboard and in the next rotation ruined her floor routine by falling on to her bottom and also stepping outside the area after tumbling sequences at the National Indoor Stadium.
She said a hold-up to her being called to start her beam performance had thrown her.
United States' Alicia Sacramone looks on during the women's team final of the artistic gymnastics event of the Beijing 2008 Olympic Games in Beijing on August 13, 2008. [Agencies]
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"I was just really eager to do my routine and get the show on the road but they held me for quite some time. I just guess I let my nerves get to me," she told reporters, struggling to hold back tears.