The U.S. Open champion was joined at 7-under 133 by first-round co-leader Alvaro Quiros of Spain, who also had a 69.
Panuphol Pittayarat of the Philippines shot a 65 and Scotland’s Richie Ramsay had a 66 to sit a shot back in second.
McIlroy had a chance to grab the outright lead at the last hole, but missed a 4-foot putt for par to finish an up-and-down round with a bogey, his second over the last three holes.
David Horsey of Britain, who had a share of the lead after the opening day alongside McIlroy and Quiros, slipped to 4 under after a 72.
Defending champion Ian Poulter shot a 68 that included an eagle, three birdies and three bogeys. He was among a group of eight tied for 21st six shots back.
McIlroy blamed his poor finish on a hectic schedule.
“I’m mentally and physically fatigued and it showed in a couple of tired swings toward the end. But I don’t think the season was long, I made the season long for myself. It was not as if I was obligated to play,” said McIlroy, whose round included four birdies and three bogeys.
McIlroy has had a busy two months, figuring in a number of lucrative unsanctioned events that included the Lake Malaren Shanghai Masters, where he won golf’s richest purse of $2 million.
The 22-year-old also made a weeklong jaunt across China sponsored by a Hong Kong tycoon’s property company, playing 18 holes spread across seven cities.
“The last 10 weeks has been long. It has been an experience, something I can learn from in the future,” McIlroy said.
“It is all a matter of rest. I had two weeks off in the Maldives in-between the HSBC Champions in Shanghai and the World Cup (in Hainan last week), but I got sick during this time and I was on the drip for three days,” he added.
McIlroy shot a flawless opening round of 64, but managed to hold onto a share of the lead despite struggling to find his touch Friday.
“I was not feeling myself today. I didn’t feel as if I played as well as yesterday. It’s just my energy levels are low. But it is all not bad. I’m still tied for the lead,” said McIlroy.
Pittayarat, a last-minute entry, led Asia’s challenge after he shot a sparkling second round of 65 that included an eagle and three birdies.
“It’s a lucky day. I scrambled around the course well and hit a lot of good putts,” said the Thai teenager. “I had a good feeling today and my overall score came out great.”
Pittayarat, an Asian Tour rookie, was third on the reserve list for the tournament, and only found himself in the lineup of 138 after two no-shows.
“I didn’t expect this. I barely got in and my goal was just to make the cut. I’m up there now and I will try to keep it that way on the weekend,” Pittayarat said.