Ollie Phillips, Kevin Barrett, Chris Cracknell and Isoa Damu all crossed for tries in the first half for England but the untested Welsh line-up hit back with tries by Arron Bramwell, Jimmy Norris and Ifan Evans but the whistle blew for time to run out on Wales's aspirations.
Wales made hard work of winning their other pool game against minnows China. Jevon Groves scored a last-minute winner to spare Wales' blushes to scure a narrow 19-17 victory.
Ifan Evans and Groves both scored in the first half but two tries by Li Yang left the match dead-locked at 12-12 at half time. Yang then scored a third and China looked on course for victory, when Groves broke clear to draw the scores level at 17-all and Dai Flannagan slotted the crucial conversion.
Wales will now go in the Plate draw where they play the fast improving USA in the quarter-finals tomorrow.