The Matildas have claimed a deserved 2-0 win over China but the scoreline fell short of delivering an Algarve Cup final appearance.
Injury-hit Australia endured some unlucky moments and at times struggled to break down a compact China in their third and final group match.
In the end, Chloe Logarzo and Sam Kerr found the net to ensure Alen Stajcic's side finish top of Group A and set up a third-place playoff with host nation Portugal on Thursday.
Despite scoring eight goals against China over November's two friendlies, the world No. 4 Matildas couldn't deliver the four required here to make the final of the invitational tournament, key preparation for next month's World Cup qualifiers.
Their 14th-ranked counterparts had the better of the first-half chances, and Australia could thank some resolute defending for their half-time clean sheet.
Wang Shuang sent a golden chance begging, swiping wide on the break, and Wang Shanshan had a crack that MacKenzie Arnold gathered comfortably.
China allowed Kerr little of the ball and the Matildas, toiling in a bid to dictate the midfield rhythm, couldn't find a clear passage.
One opened up in the 32nd minute when goalkeeper Wang Fei fumbled Elise Kellond-Knight's free kick.
Kerr toe-poked home but was ruled to have fouled Wang.
A lifeline finally materialised after the break.
Well-performing Alanna Kennedy put in a precise ball and Logarzo finished with finesse, looping a header over Wang Fei.
It opened the game up with Lisa De Vanna skying a sitter and Wang Shanshan heading marginally wide.
Logarzo struck it clean from 25 metres out but her effort bounced cruelly off the post.
China came close to a late equaliser off a Kennedy yellow card; Arnold saved and then spilled Wang Shuang's subsequent free kick but Kerr was on hand for the vital clearance.
Kerr finally converted a chance at the death, clipping a lob past the onrushing keeper that sailed into the far corner.
Sweden and the Netherlands qualified for the final.