Möregårdh lost the first set after falling behind early, but showed his class in the second and third sets.
Rubio came back strongly in the fourth set and forced a fifth and decisive set. Möregårdh was the better player in the final set and sealed the win with a superb forehand.
In the quarterfinals, Möregårdh will face fifth-ranked Lin Yun-Ju of Taiwan.
The WTT China Smash is a warm-up for the European Championships in Slovenia, which begin this weekend.
