Chwalinska will next face world number 170 Sonay Kartal, who became the lowest-ranked player to reach a WTA 1000 final with a gritty 7-6(9), 7-6(5) win over Jelena Ostapenko.
Swiatek, who needed to win the title in Wuhan to increase her slim chances of qualifying for the year-end WTA Finals, battled a left thigh injury during the match, which limited her movement against her crafty left-handed opponent.
Meanwhile, Chwalinska did well to manage the mental challenges of the occasion as she hit yet another new milestone in a breakthrough season that saw her make a surprise run to the French Open final, as a qualifier, back in June.
"Obviously Iga wasn't 100 percent today, so I wish her all the best, of course," said the 25-year-old Pole, who is contesting just her fourth WTA 1000 main draw.
"It's always tough to play against a fellow Polish player. She's a great champion, a living legend, she won everything. So it was a great honour for me to share the court with her today.
"I think I still don't really realise what's going on and the fact that I won against her is actually crazy for me."
The momentum swung back and forth in the opening frame before Swiatek attempted to serve for a one-set lead at 5-3.
The seventh seed could not close though, despite holding two set points, and soon found herself trailing Chwalinska 5-6.
Ahead of game 12, Swiatek took a medical timeout and was in pain and in tears while getting her left thigh attended to.
Chwalinska then warded off break points to scoop up the 80-minute first set.
In a bizarre opening game of the second set, a tearful Swiatek had an animated discussion with her strength and conditioning coach Maciej Ryszczuk on the sidelines, while facing two break points.
She was handed a time violation warning as a result and went on to drop a fifth consecutive game.
The six-time Grand Slam champion could not do much else to stop Chwalinska, who wrapped up the victory in two hours and eight minutes to set up a final showdown with Kartal.