The nine-time world ladies snooker champion missed out on a last 64 clash with 2010 Crucible champion Neil Robertson after the defeat to the home player.
Yinghui claimed a 3-0 lead, despite only one break over 21, but the 27-year-old from Dudley produced a run of 79 and then a 38 break in the next helped her reduce the deficit to one.
But breaks of 46 and 42 saw the Chinese amateur through to a dream clash with the Australian former world champion.
Evans beat Thepchaiya Un-Nooh in Gloucester last month to reach this stage with this tournament the first to have a flat 128-man draw which included all the world's top players from the opening stage.
Jimmy White rolled back the years to stun defending champion Ricky Walden and reach the last 32.
The 51-year-old had breaks of 60, 59, 60 and 57 as he raced into a 4-1 lead.
And although the World Championship semi-finalist hit back with a run of 70 in the next, the Whirlwind completed victory via a 42 break.
Wuxi's own Ding Junhui saw off Jamie Burnett 5-3, while Joe Perry - who is on a roll in China after winning the AT1 title in Yixing last week - began with a 5-2 success against fellow Englishman Jamie Cope.
Mark Selby and Shaun Murphy were eliminated in qualifying while Ronnie O'Sullivan pulled out and Stephen Maguire did not enter.
Ding Junhui 5-3 Jamie Burnett
Marco Fu 5-2 Nigel Bond
Martin Gould 5-3 Kurt Maflin
Cao Yupeng 5-3 Michael White
Joe Perry 5-2 Jamie Cope
Joel Walker 5-2 Alex Davies
Alan McManus 5-3 Ken Doherty
Lu Haotian 5-3 Craig Steadman
Anthony Hamilton 5-2 Ryan Day
Jimmy White 5-2 Ricky Walden
Stuart Bingham 5-2 Yu Delu
David Gilbert 5-2 Andrew Pagett
Mark King 5-3 Rory McLeod
Dechawat Poomjaeng 5-1 Dominic Dale
Wild Card Qualifiers
Lu Ning 5-3 Adam Duffy
Zhu Yinghui 5-2 Reanne Evans
Vinnie Calabrese 5-4 Zhao Xintong
Jimmy Robertson 5-4 Zhou Yuelong