The manager's first game in charge of China ended in a 0-0 draw with Qatar.
China drew 0-0 with Qatar to remain bottom of Group A but Lippi took heart from a bright performance when the hosts twice hit the woodwork in Kunming.
Lippi's China now have five games to rise up the six-team table, where the top two win automatic spots at Russia 2018 and the third-placed side goes into a play-off series.
"We knew before this match that our hope of qualifying to the World Cup in Russia was a very small one and it will be even more difficult after this game," said Lippi, according to the Asian Football Confederation website.
"After today's match, I want to tell my players that they are not inferior to their opponents. We were able to play good football and proved that we were better than Qatar.
"We will do our best as long as we have a theoretical chance of qualifying. We are on the right track and that is what matters. If we keep performing like this, the hope is not dead yet."
Lippi, who coached Italy to win the 2006 World Cup, is under no illusions as to the task facing China, who have just two points from five games and are currently seven adrift of third place.
When qualifying resumes in March, China host South Korea and they also have tough away assignments against Iran, Syria and Qatar among their final games.
Elsewhere South Korea beat Uzbekistan 2-1 to move second in Group A, one behind leaders Iran, and Japan also overcame Saudi Arabia to join their visitors on 10 points at the top of Group B.
But Asian champions Australia were left fuming after they needed a second-half Mile Jedinak penalty to rescue a point in their surprise 2-2 draw with Thailand.
"What's up for grabs is a position at the World Cup and we have to be aware that every team is willing to die in order to achieve it and we have to be better than them with that aspect," said goalkeeper Mat Ryan, according to the Sydney Morning Herald.
"I think that's the first step for us and then we have to go about implementing our system of play and how we want to play and it's not good enough, tonight."