Eddie Lee, who was one of seven first-round leaders along with Els, shot a 6-under 66 to take second place at 11-under-par 133. Raphael Jacquelin notched his second straight round of 5-under 67 to end alone in third place at minus-10.
Els began his round on the back nine and carded three straight pars. The South African then turned it on. He birdied the par-5 13th for the second straight round.
The third-ranked player in the world then dropped in back-to-back birdie putts from the 15th to get to 8 under.
Els made the turn at minus-nine thanks to a birdie on the 18th, his ninth. He then carded birdies on both one and two, each for the second straight day.
The 35-year-old rolled home a birdie try at the par-4 fourth. Els came right back with a birdie on No. 5 at Tomson Shanghai Pudong Golf Club as he played his last 11 holes in 8 under.
Els cooled with three pars in a row. He then dropped his 4-iron second shot within inches of the cup for a tap-in eagle at the par-5 ninth, his last, to post a 62.
'It was really good today,' said an understated Els. 'I got fortunate here and there, but overall I felt like I kept it in play and made more putts. But I felt comfortable with my swing and it was just one of those nice days when you want to keep going. The ninth was a great way to finish too.'
Lee, meanwhile, posted two birdies over his opening nine holes to get to 7 under. He picked up his third birdie at the 11th.
The Korean-born Lee then converted consecutive birdie chances from the 13th. Lee dropped in his final birdie at the par-4 16th to complete a bogey-free round.
'I actually hit it well on the front nine, but had a couple of bad shots on the back,' Lee said. 'But my short game was good today and I'm happy with my putting and my chipping. Actually, I just happy with the way I am playing overall.'
Jeev Milkha Singh and Irishman Peter Lawrie share eighth place at 7-under-par 137. Patrik Sjoland and Richard Sterne are one stroke further back at minus-6.
Defending champion Miguel Angel Jimenez struggled to a 1-over 73. He posted four birdies, three bogeys and a double bogey and stands at 1-under-par 143 in a tie for 47th.
Seventy-five players advanced to the final two rounds as the cut line fell at even-par 144. Among those missing out on the weekend were K.J. Choi, Barry Lane and Alex Cejka.