The 28-year-old from Perth shot her second 67 in a row to sit fourth at 10 under and trail leader Sei Young Kim by two shots.
Lee, a two-time major winner but yet to taste success this year, bogeyed the fourth and eighth holes but enjoyed birdies on the first, fifth, 10th, 11th, 13th, 14th and 18th.
South Korean Kim held on to her lead with a two-under 70 for a 12-under total after opening with a sizzling 62 — her lowest round of the season — as she looks for her first victory in 2024.
Kim is one shot ahead of Lucy Li of the United States, who had a four-under 68, and Mao Saigo of Japan, who carded a seven-under 65.
A stylish finish for the clubhouse leader! ✨— LPGA (@LPGA) Mao Saigo has the share of the lead at -11! pic.twitter.com/cnHj92T1JTOctober 11, 2024
Yealimi Noh (67) of the US trails by three.
The chasing field is crowded heading into Saturday's third round with nine golfers tied for sixth and just four shots off the lead.
The two other Australians in the field in Hira Naveed and Hannah Green have plenty of work to do.
Naveed shot a 68 to be three under and world No.7 Green (70) is three-over par.
Saigo and Li are both looking for their first victories on the LPGA Tour, while Kim has 12 LPGA Tour wins.
Two of the LPGA's top players — Nelly Korda and Lydia Ko — are not in the field this week in China. Both are entered next week in the BMW Ladies Championship in South Korea.
With AAP.
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