World No. 1 Rory McIlroy sounded a stark warning to his rivals after moving to within two shots of the lead on day two of the BMW Masters in Shanghai.

Despite the constant sounds of nearby building construction, sirens and even fireworks, along with the distraction of on-course mobile phones, McIlroy didn’t drop a shot in a round of a seven under par 65 to move into second place on 12-under par.

Sweden’s Peter Hanson, and McIlroy’s double winning Ryder Cup teammate, posted an eight under par 64 to lead the $7m event by two strokes on 14-under par on the Lake Malaren Golf Club course.Hanson had started his round with a first hole bogey before eight birdies in 16 holes.

“It’s amazing how many good rounds come together after a bogey on the first,” he said.

“But after starting with a bogey I got it straight back with a birdie on three.”

Hanson captured a fifth European Tour victory a fortnight before the Ryder Cup in winning the KLM Open at Hilversum.

But after the euphoria of the Ryder Cup the 35-year old Orlando-based Swede has set his sights on a sixth Tour victory and improving his current career-high 25^th World Ranking.

“I’ve been fighting really hard with my game after the Ryder Cup, to get back the motivation, because it is hard after such a big week and you prepare for so long to try and qualify for the team,” he also said.

“I’ve got four events left this year, three on the European Tour and the Nedbank Challenge (South Africa), so I’ve set some high goals and I want to finish the year as strongly as possible.

“If I can get away with a big win one of these four weeks, I would be very, very happy takein a break for Christmas.”

However Hanson will now have to deal with McIlroy over the closing two rounds, in the exhibition match on the same Shanghai course last year, and with the game’s best player well and truly wearing his competition face.

Unlike Hanson’s sole win in Holland, McIlroy has won four times this season, including a second Major Championship title.

“It looks quite routine at the minute,” said McIlroy.

“The more you put yourself in this position, the more comfortable you become with it.  I like the fact that most weeks I tee it up, I can get myself in contention.

“This is just another one of those weeks, and I’ll try and continue that for as long as I can.”

Fellow Irishman Shane Lowry and Sweden’s Robert Karlsson shot 64s to be sharing third place on nine under par.

Lowry continues to draw on the confidence of a first pro career success less than a fortnight ago in capturing the Portugal Masters.

Karlsson is seeking to end a near two-year winless drought since capturing the season-ending 2010 Dubai World Championship.

However the current World No. 90 ranked Swede’s primary concern is trying to retain his PGA Tour card for 2013.

Karlsson arrived in China looking for a first victory in nearly two years but of more concern to the Monaco-based Swede is he’s presently lying 158^th on the PGA money list with earnings this year of only $362,085.

It is why Karlsson has entered next week’s final 2012 PGA Tour event, the $4.7m Children’s Miracle Network Hospital Classic in Lake Beuna Vista, Florida, where he will need to improve his money list standing by 33 places and move up to 125^th and retain full 2013 Tour membership.

“Of course, I won’t to avoid going to the Tour School but that is not always as easy to achieve,” he added.

“But then if I do continue to play well here it will clash with Dubai, so we’ll see what happens.

“So at the moment I have to go back and play the Disney next week and then Stage Two o[f PGA qualifying.

“But at the end of the day I am in a very fortunate position as I have another year of exemption for the European Tour.

“There are a lot of players in a lot worse situation than I am, so I am not complaining.  I haven’t had a good year and you have to accept the consequences.

“So a good result this week, and what with the huge World Ranking points on offer, will help with the confidence to put together some decent rounds.”