The 12th seeded Indian lost 19-21 20-22 in a 47-minute men's singles match here last night.
Srikanth, on a comeback trail after recovering from an ankle injury, blew 12-6 and 16-12 leads in the two games to go down against the second seed, who is also a two-time World champion and All England champion.
In the second round, Subhankar Dey suffered a 14-21 8-21 loss to fifth seed NG Ka Long Angus of Hong Kong, while Harshit Aggarwal lost 15-21 11-21 to eighth seed Hu Yun of Hong Kong.
The Indian grabbed two points but Chen earned the next two points to pocket the first game.
In the second game, Chen moved ahead 9-5 but Srikanth reeled off seven straight points to grab the lead. He kept his nose ahead till 16-12 when the Chinese marched ahead with a six-point burst and despite some desperate attempts by Srikanth, Chen had the last laugh.
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