The Welsh XV had plenty of possession to win the game but did not break the gainline often enough up front or run strongly and directly enough behind.
The Welsh forwards more than held their own but behind the scrum it was the tourists who had the edge in both pace and penetration.
Two of the threequarter line, centre Luke McAlister and wing Joe Rokocoko, played in the under-19 side that won the Junior World Cup in Chile last year and they looked the class players of the night.
Rokocoko made the first try with a powerful blindside surge and well-timed pass to supporting scrum-half Scott Cowan to give New Zealand a 7-6 lead, McAlister kicking the conversion.
Cardiff fly-half Nick MacLeod had kicked two penalties to give Wales a 6-0 lead and his third just before half-time put Wales into a tenuous 9-7 lead at the interval.
McAlister kicked New Zealand back into the lead with a penalty before replacement wing Tony Koonwaiyou dramatically snatched the ball out of the grasp of Llanelli full-back Ceiron Thomas to sprint clear for a try converted by McAlister.
Wales threatened but handled sloppily in the face of aggressive defence. The forwards with hooker Huw Bennett (Swansea) and No 8 James Malpas (Cardiff) continued to make a real game of it.
Wales: Pens - N MacLeod (3). New Zealand: Tries - S Cowan, T Koonwaiyou; cons - L McAlister (2); pen - McAlister.
New Zealand Schools will face Welsh Schools U18 at Neath RFC on Friday 18 January. The match kicks off at 7.15pm
With Liam Williams forced out of the World Cup through injury, lock Luke Charteris and Skills Coach Neil Jenkins say they have to put yesterday's defeat behind them as Wales now look ahead to another physical encounter against South Africa in the quarter-finals of the Rugby World Cup.
WRU Consultant Head of Physical Performance Paul Stridgeon praises the Physical Performance department for their work and dedication as he addresses the media ahead of Wales' Pool A clash against Australia
Twelve young people have been selected to follow a one year WRU Coach Core apprenticeship programme. Coach Core was set up by the Royal Foundation of the Duke and Duchess of Cambridge and Prince Harry as part of the Olympics legacy in 2012 and the Duke of Cambridge was on hand to meet the apprentices on their first day in the job. The programme has been funded by the Hunter Foundation.
The WRU has launched a campaign to create a long term legacy for Welsh club rugby by highlighting the advantages of volunteering. Rhian Edwards, a volunteer at Seven Sisters, has enjoyed many benefits of her volunteering at a grassroots rugby club including being part of the Rugby World Cup volunteer workforce after being nominated by the WRU - and the WRU is asking for more people to develop their 'Welsh rugby roots'.