Minjee Lee has eked out an even-par second round to stay well in the mix at the Blue Bay LPGA Tour event in China.

Bidding for a second title at the $US2.2 million ($A3.3 million) tournament, after winning in record style in 2016, Lee relinquished her first-round lead with a rollercoaster 72 on Friday.

But two birdies in the last three holes at least helped Australia's world No.5 steady the ship as Lee finished round two in a tie for fourth at seven under.

Lee trails in-form American Sarah Schmelzel and South Korean Narin An by two shots at the halfway mark of the third and final event of the LPGA Tour's autumn Asian swing.

Schmelzel, who tied for eighth at the HSBC Women's World Championship on Sunday behind Lee's compatriot Hannah Green, carded a 69 to move to nine under for the championship.

An birdied the first five holes in a spectacular start to her seven-under round of 65 to also soar to nine under.

An's fellow Korean Hye-Jin Choi (69) is one stroke behind in solo third, one shot ahead of Lee and China's Ruixin Liu (71).

After opening on Thursday with a bogey-free 65, which matched her own record start eight years ago, Lee dropped three shots in her first 10 holes in the second round.

But the dual major winner salvaged a 72 with three back-nine birdies, including two straight late on holes 16 and 17.