Editor's note: CNN's Living Golf will have an exclusive joint interview with Tiger Woods and Rory McIlroy which debuts in full on November 8 at 1030 and 1730 GMT.
(CNN) -- World No. 1 Rory McIlroy put himself in a good position to defend his BMW Masters title on Friday, firing a seven-under-par 65 that left him two strokes off the lead held by Ryder Cup teammate Peter Hanson in Shanghai.
The duo, both part of Jose Maria Olazabal's team which clinched a thrilling victory against the U.S. last month, pulled away from the field at the Lake Malaren in the second round of the $7 million tournament -- which is this year sanctioned by the European Tour following its inception in 2011.
Hanson went one shot better than PGA Championship winner McIlroy, with the world No. 25 carding 64 to finish on 14 under at the halfway stage.
"It was a very good day," the 23-year-old McIlroy told the European Tour's official website after a round which included seven birdies.
"I played very well -- a little better than I did yesterday. I hit the ball a lot better, and gave myself plenty of opportunities.
"When I did need to make a par putt here or there, I was able to save those, and overall it was just a very good round of golf and obviously in a great position going into the weekend."
Hanson is in a strong position to clinch a sixth career title on the European Tour, although his day got off to a poor start with a bogey at the par-four first hole before going on to card nine birdies over the remaining 17.
"It's amazing how many good rounds come together after a bogey on the first," said the 35-year-old Swede. "It's pretty soft so you can see yourself shooting some low scores here.
"I'm happy with the way I played so far and I know it's going to be a tough one coming up against the world No. 1 these last couple of days on a golf course he obviously loves. He won here last year."
Hanson's compatriot Robert Karlsson shot 64 to be third, three shots behind McIlroy and one ahead of British Ryder Cup hero Justin Rose (68).
World No. 5 Rose is competing with McIlroy to top the European Tour's "Race to Dubai" money list. He can rise above McIlroy into pole position if he pockets the $1.16 million first prize this weekend.
He was tied for fourth with overnight leader Jamie Donaldson of Wales, who slumped to a 74 after his opening 62, and Ireland's Shane Lowry, who won the Portuguese Masters a fortnight ago.
After the conclusion of this event McIlroy will remain in China for a one-on-one match play contest with 14-time major winner Tiger Woods.
World No. 2 Woods is also playing in Asia this weekend. The American is tied for fifth at the PGA Tour's CIMB Classic in Malaysia after shooting a four-under par 67 in the second round.
Woods was three shots adrift of compatriot Robert Garrigus, who led by two shots in Kuala Lumpur after a second sucessive 64 on Friday.
South Africa's Jbe' Kruger also shot 64 to be second, while first-round lead Troy Matteson of the U.S. was tied for third with Australian Greg Chalmers -- a shot ahead of Woods, Kevin Na and Brendon de Jonge.