Higgins, aiming for a title double in China after winning the Shanghai Masters last month, led 2-0, courtesy of breaks of 71 and 73 but Cao fought back to take the next five frames.
The Scot won the next – he missed out on a possible 147 after failing to pot the 11th red – but his rival held his nerve to wrap up the biggest win of his fledgling career. "It's a big tournament so I'm gutted to go out in the first round," said Higgins. "I started well but then I missed a lot of chances and I didn't deserve to win."
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