The Chinese added four birdies and a single bogey to his stunning start to get to 11 under and lead the way from Frenchman Victor Perez.
Wu had led by four just after the turn but Perez stormed home in 31 to match his 67 and cut the gap to one, with defending champion Bryson DeChambeau, fellow American Kurt Kitayama and Englishman Tom Lewis a shot further back.
Wu finished 137th on the Race to Dubai last season but was showing the form that has made him a three time European Tour winner at Emirates Golf Club.
And on the day his home country celebrates the start of the year of the rat, Wu put himself in an excellent position to be having more celebrations on Sunday.
"That's my 'Happy Chinese New Year Shot'," he said of his hole out eagle.
"Today my short game was great, just great. I got a feeling just good chips and good with the putter.
"I'm very comfortable and very relaxed for the weekend and playing the final round. I'm always happy to play the final round in the final group."
Wu's opening tee shot found the rough but his second was perfect, hitting the front of the green and rolling into the cup for an eagle and a share of the lead.
He played a poor bunker shot on the par five third but once again recovered in style, holing a chip to get to nine under and hit the front.
He took advantage of the par five tenth and when he holed a long putt on the 11th, the lead was four.
Lewis had started the day six shots off the lead but made birdies on the second, fourth, eighth, tenth and 12th and, when he added another on the 17th, the lead was trimmed to three.
Wu holed from 15 feet on the 12th to make it three birdies in a row but Lewis hit a remarkable second into the last and, while he missed his eagle putt, he was the clubhouse leader.
Wu bogeyed the 16th after finding a nasty lie off the tee and the fast finishing Perez soon ensured he led by the narrowest of margins.
The Alfred Dunhill Links Championship winner had bogeyed the fourth and fifth but he made a gain on the eighth and then added four in a row from the tenth.
An up-and-down on the 17th moved him level with Lewis and a closing birdie had him in double figures.
DeChambeau had a roller coaster of a day, chipping in at the 12th and having a birdie-birdie finish to take his tally to six, but he also recorded four bogeys while battling illness.
Kitayama made birdies on the second, seventh, ninth, 13th and last and added a bogey on the 12th in his 68.
Pepperell birded the par five third but then dropped shots on the fifth, sixth and 12th before fighting back with gains on the 13th and 17th.
Elvira eagled the last in a 66, while Fleetwood carded a 69 and Burmester signed for a 72.