World number two Phil Mickelson produced a stunning bogey-free, six-under-par round to trail fellow American Kevin Stadler by just one stroke at the Sheshan International Golf Club in Shanghai.
Mickelson's round was equalled by Scotland's Simon Yates who lies two shots further back with England's Ross Fisher, who produced a second consecutive four-under-par 68 today.
Yates tied Mickelson for the best round of the day with a run of three birdies over his last five holes as the duo benefited from calmer afternoon conditions in Shanghai.
Three-time major winner Vijay Singh and South African Andrew McLardy were a shot further adrift at seven under at the midway point of the US dollars five million showpiece event.
Open champion Padraig Harrington and US Open champion Angel Cabrera remained four under after level-par second rounds in the testing morning conditions.
Paul Casey signed for a one-under-par second round courtesy of a birdie at the last to head a group which included defending champion Yang Yong-Eun of Korea.
Liverpool's Nick Dougherty turned in a two-under-par second round to move to three under overall, but Lee Westwood slipped back to level par after a 74 on Friday.
"I'm not really nervous, yet. I'm enjoying my time here; I'm not a very nervous person in general. But I'm sure if this position holds up over the weekend I'll get a bit jittery," said Stadler, who revealed yesterday that the relief of securing his PGA Tour card for next season last week handed him the extra confidence heading into this week's event.
"The course played pretty tough today. The wind was pretty strong and the pins were a lot tougher. I am just happy to shoot the score I did. I was plodding along at even par for most of the day and I was able to get a few late ones to make it a good round."
Fisher, who landed his first career win at the KLM Open in Holland earlier this year, reached the turn one under after cancelling out an early bogey with birdies at the par-four fifth and par-five eighth.
The 26-year-old picked up a shot to start the back nine, but after slipping back to one under with a bogey two holes later, Fisher produced a strong finish with a run of three birdies over his final five holes which included a 10-foot putt at the last despite finding the rough off the tee.
"I am a little surprised to be where I am on the leaderboard with a score like that. I don't think the course is playing overly difficult, but to be honest I've driven the ball extremely well over the first two days," said Fisher.
"But I am obviously pleased to shoot two 68s and very pleased to be in the position I am.
"If you drive the ball well around here, you're going to score well because the rough is so penal. The greens are perfect and you can roll in 20-footers and halfway there you know if it's a good stroke or not."
Ian Poulter beat the cut by just one stroke after tumbling down the leaderboard with a second-round six-over-par 68, but Scotland's Colin Montgomerie and French Open champion Graeme Storm were not as fortunate.
Montgomerie was always in danger after shooting a second-round 68 to slump to seven over and his fate was sealed late in the day after a run of late birdies raised the cut to five over.
Storm was always going to struggle after an opening-round 79 and was left to turn his attentions to next week's Hong Kong Open after carding a second-round 74 to finish at nine over par.
