Kieron Achara led all scorers with 16 points, Nate Reinking had 12 and Drew Sullivan 11. Rob Archibald signed off with eight points and nine rebounds.
"This was an amazing game, an amazing feeling to get this win in-front of very passionate fans who have stood by us throughout," said GB forward Joel Freeland. "China were tough and very quick so we had to be ready for that and we concentrated on our strengths and played to that really.
"This was a great experience, right before I go to the NBA to say I represented my country at an Olympic Games and in London, it's a overwhelming feeling. I am very, very proud."
After China had jumped out to a quick 7-0 lead, Great Britain came storming back to tie the game. China briefly took the lead again but then GB went on a 20-5 run, posting a 27-15 lead in the first thanks in part to the outside shooting of Achara.
GB had starters in foul trouble, but it allowed the reserves to get plenty of court time and they responded by increasing the lead over China to 46-31 at the half.
Having squandered a lead in the third quarter of Saturday's game against Australia, GB ensured there would no repeat this time around. Baskets from Joel Freeland and Drew Sullivan, along with defensive pressure at the other end of the floor quickly snuffed out any hopes of a China comeback.
Leading 72-48 going into the final quarter, both sides struggled offensively for a stretch, but GB were able to run up the big win thanks to Eric Boateng and Kyle Johnson making a number of baskets towards the end.
"We wanted to come out and make history," said GB coach Chris Finch. "Our guys were up for that challenge. It's what we needed. It's what the basketball community in general needed. We're very proud.
"The odyssey has been an amazing one. The challenge was to build something. That's why I took the job.
"I never thought I'd still be here in seven years. I always laugh when people say we were given our spot in the Olympics. It didn't feel like that when we had to battle though Division B and qualify for EuroBasket in 2009.
"We achieved a lot of things and kept proving ourselves and that's the most satisfying thing."
