By Alan Baldwin

SHANGHAI (Reuters) - Germany's Nico Rosberg celebrated the first victory of his Formula One career with a commanding pole-to-flag win for Mercedes in China on Sunday.

While the son of 1982 champion Keke sprayed the champagne to mark the end of an 111-race wait, the German manufacturer rolled back the decades to savour their first grand prix success as a works team since 1955.

"Brilliant race, Nico. Just brilliant," yelled team principal Ross Brawn over the radio as the 26-year-old let out a long and loud whoop of delight after taking the chequered flag.

Britain's Jenson Button finished a distant second for Mercedes-powered McLaren, 20.6 seconds behind, with team mate and compatriot Lewis Hamilton third for the third race in a row to take the championship lead.

Hamilton now has 45 points after three races to Button's 43. Ferrari's Fernando Alonso, who had led before Shanghai, finished ninth and dropped to third overall with 37.

Rosberg's victory was the first by Mercedes, as a works team, since 1955, when Argentine Juan Manuel Fangio won that year's season-ending Italian Grand Prix from pole.

While Rosberg celebrated, drenching Mercedes motorsport vice-president Norbert Haug in champagne on the podium with the eager assistance of Button and Hamilton, there was disappointment for team mate Michael Schumacher.

The seven times world champion, winner of a record 91 races, had started alongside Rosberg on the front row but the 43-year-old's hopes of a first podium appearance since he was at Ferrari in 2006, disappeared on lap 13 after a pitstop.

To the despair of the mechanic on the front right wheel, Schumacher was given the signal to go before the nut was attached properly. He rejoined the race before having to pull off and retire.

"The front wheel got a bit loose, but I don't know what happened. I feel a bit sorry for one of my boys, but that's part of the game," said Schumacher philosophically.

Button's hopes of a second win in three races were also dashed in the pits when the crew struggled with the rear left, losing vital seconds, at his third and final stop.

Australian Mark Webber was fourth for Red Bull with double world champion team mate Sebastian Vettel fifth after starting 11th, his lowest grid placing since 2009.

Sauber's Japanese Kamui Kobayashi took the final point for Sauber in 10th.

(Reporting by Alan Baldwin, editing by Alastair Himmer)