The 22-year-old, who has now won nine of his last 11 matches, has dropped just one set in Beijing where he will look to repeat his quarter-final victory over Nadal in Cincinnati Open in August.
Kyrgios started Sunday struggling with his serve and never found a confident range throughout the match.
"I think he's close to his best level - if not he's even improved", Croft said, as quoted in Express.
Nadal was well in control by then and he raced into a 5-0 lead in the second set before Kyrgios slightly delayed the inevitable as the Spaniard sauntered to his 12th consecutive win.
The Australian, who displayed his best in dumping out 20-year-old rising star Alexander Zverev in the semi-finals, said Nadal had "destroyed" him and admitted he had failed to react professionally.
Former British number one Annabel Croft believes Rafael Nadal's decision to let his body recover has paid dividends following his China Open win.
"I had very tough draw here".
Kyrgios was incensed in the opening game when a line call went against him on break point.
"He has a massive future ahead and I'm really good friends with him so it's always fun playing him".
Now sits in 19th position in the world rankings, Kyrgios is still striving for the ATP Finals in London, which is only open to the world top eight players. I think I've found my objective in the last couple of months.
Despite Kyrgios' meltdown, 16-time Grand Slam champion Nadal has no doubts about the Australian player's talent as he said that he was baffled by some of his tactics.