Myer Bevan's first-half penalty was enough to give New Zealand victory in an often scrappy encounter, keeping alive the All Whites' hopes of progressing to the tournament's final.
As they did in their first up loss to Kenya, the All Whites spurned a number of first-half chances before eventually opening the scoring.
Also for the second game running, Wellington Phoenix teenager Sarpreet Singh was New Zealand's best attacker. Moved from the left side of midfield into a more central role, he popped up regularly on both flanks, his skill and industry earning the spot-kick from which New Zealand went ahead nine minutes before the break.
After Henry Cameron and the impressive Bevan were denied, Singh was brought down in the box and Bevan confidently slotted home his second international goal from the spot.
Until then, the first half had followed a remarkably similar pattern to New Zealand's opening game at the tournament, with a clutch of chances created but not converted.
Jai Ingham had two opportunities in quick succession after some penalty area pinball before Bevan was denied by a last-ditch tackle then headed straight at the goalkeeper from seven yards.
Singh had New Zealand's best second-half chance, taking one touch too many when played in by Ingham. The All Whites were also denied what looked to be a clear penalty with 15 minutes remaining when substitute Noah Billingsley appeared to be brought down by the Chinese Taipei goalkeeper.
At the other end, Chinese Taipei were energetic but lacked front-third quality and despite creating a number of openings, were unable to score for the second game running.
Schmid, who took charge this year, made six changes to the side which started the opening match, handing international debuts to goalkeeper Nik Tzanev and Wellington Phoenix teenager Liberato Cacace, both of who acquitted themselves well. Tzanev tipped a goal-bound header over the bar in the closing stages to preserve his side's lead.
Cameron, Bevan, Justin Gulley and Te Atawhai Hudson-Wihongi – who all came off the bench in game one – were elevated to the starting XI, while recent All Whites regular Clayton Lewis also made his first appearance at the tournament as a second-half substitute.
New Zealand meet unbeaten hosts India in their final pool game on Friday morning (NZT), needing to win to have a chance of making the final.
New Zealand 1 (Bevan pen 36'), Chinese Taipei 0.
