China's 0-0 draw with Qatar did nothing to boost their dwindling hopes of reaching Russia 2018, even after World Cup-winning coach Lippi was appointed last month.
Mile Jedinak scored twice from the spot as Australia came from behind to draw 2-2 with Thailand, dropping out of Group B's automatic qualifying places as a result.
Elsewhere Japan eased the pressure on coach Vahid Halilhodzic with a 2-1 win over Saudi Arabia, while South Korea needed Koo Ja-Cheol's late winner to overcome Uzbekistan 2-1.
Lippi arrived in China with great fanfare -- and reportedly, a huge pay cheque -- but he was unable to start with a win which would have lifted them off the bottom of Group A.
The Italian admits ambitious China need a "miracle" to reach Russia, which would be only their second World Cup after their sole appearance ended pointless and goalless in 2002.
China enjoyed more chances but they were unable to find the breakthrough against 2022 World Cup hosts Qatar, who remain second from bottom and also unlikely to qualify for 2018.
In Bangkok, Teerasil Dangda's double left Australia on the brink of a shock defeat, before Socceroos captain Jedinak scored his second penalty of the night on 65 minutes.
The draw demoted Australia from second to third in their group, a point behind Saudi Arabia and Japan, with only the top two winning automatic qualification for Russia.
'We had to stay strong'
"I think to come away with less than three points here is a real shame, a big disappointment," said Aston Villa's Jedinak. "We have to move forward, we need to assess what's gone wrong here and try to rectify it quickly."
Goals from Hiroshi Kiyotake and Genki Haraguchi put Japan back on track as they beat Saudi Arabia 2-1 in Saitama to go level on points with the visitors at the top of Group B.
Kiyotake's penalty on the stroke of half-time was hotly disputed by the Saudis and scuffles broke out between the players as they disappeared down the tunnel.
"Credit to the players for beating a good Saudi team," said Halilhodzic, whose future has been plunged into doubt after a poor run of form during the qualifying campaign.
"This is a big victory for us but it was a deserved one," added the Franco-Bosnian, after his side improved to 10 points from five games, with five remaining.
"We have had to stay strong to come back from some difficult situations and no doubt there will be more to overcome before we get to Russia."
South Korea gave their coach Uli Stielike a 62nd birthday to remember but there were some nervy moments after Uzbekistan's Marat Bikmaev opened the scoring on 25 minutes.
Nam Tae-Hee equalised after half-time before Koo rifled in the winner on 85 minutes, ensuring Stielike's men leapfrog the Uzbeks into second place in Group A.
Iran were held 0-0 by Syria in Malaysia but they remain top of the group, one point ahead of South Korea.
In a late Group B match in Abu Dhabi, the UAE defeated Iraq 2-0 to take their tally to nine points and level with Australia.
Ahmed Khalil put the Emiratis ahead in the 26th minute while Ismail Matar found the mark in second-half stoppage time as the hosts kept their hopes of a World Cup finals berth alive.