Having birdied three of his opening four holes at Linkou International Golf Club, Chan collected two more birdies alongside two bogeys before eagling the par-five 18th to sign for a 67 and join Khor Kheng Hwai on five under par at the head of the field.
"Overall I'm happy with how I've played today. The eagle on the 18th was especially sweet as it's always nice to see your name right at the top of the leaderboard," Chan told the Asian Tour website.
Khor, meanwhile, carded five birdies and just a solitary bogey at the second to return a 68 and climb into contention.
"I'm pleasantly surprised with how I've played the last two rounds as I've been struggling with my game the whole year," said the Malaysian.
"But when I came out to play during the practice rounds, I started hitting the ball very well and it surprised me as well. With the scores after two days, I'm even more surprised."
The duo lead Lu Wen-teh, Chapchai Nirat and Lin Keng-chi by a stroke with another four players just two shots off the pace on three under going into the weekend.