China, who lost all their group games, got the upper hand in the first half, but could not find any means to crack Iceland's packed defence.

Han Duan of Chinese women soccer team(L) challenges a footballer from Iceland during Algarve Cup women' football tournament. China lost to Iceland 4-1 in the ninth-place playoff.[sina.com]

After the break, they pushed forward for goals leaving their shambolic defence open to Iceland's predators.

Iceland midfielder Dora Stefansdottir opened the scoring in the 67th minute when she took advantage of a fluffy clearance by China's defender Weng Xinzhi to poke the ball past goalkeeper Zhang Yanru.

Three minutes later, Iceland made it 2-0 through midfielder Samuel Sdottir who headed in a corner. Her teammate Margret Vidarsdottir put the icing on the cake by scoring two goals in the last 10 minutes.

China, who seemed to have lost their composure, pulled one consolation goal back in the injury time when substitute Lou Xiaoxu found the net on a break.

China's caretaker coach Wang Haiming was left almost speechless by the unexpected loss.

"Now China's women's football have slumped to the bottom, what should I say to you?" he said.

"My players lost desire to play, let alone to win. We must go back to China to reflect upon ourselves thoroughly," he said.

Sigurdur Ragnar Eyjolfsson, head coach of Iceland was surprised by his team's win.

"We never expected to beat China before the game as they are a historically strong team. I don't know what's wrong with them. What I should say is we played a very good game," he said.

China's poor performance in the Algarve Cup tournament was not accidental in the aftermath of their head coach Ma Liangxing's sudden and mysterious walkout, according to an insider who asked for anonymity.

"The team is at the brink of falling apart," he said.

"As China's Football Association cannot handle Ma Liangxing's walkout properly, the team has been affected very badly, their morale is very low," he said.

Ma left the team in late January citing health problem, and was denied a return by China's FA after he claimed he has recovered in February.