O'Sullivan, who had earlier coasted past Barry Hawkins in their last-16 clash, took the opening frame of the afternoon session when doubling a re-spotted black into the bottom left corner and soon opened up a commanding 4-0 lead following a break of 96.
The five-time world champion, who was runner-up at the Champion of Champions event in Coventry last week, will play John Higgins for a place in the final.
Scot Higgins, the world number three, knocked out home player Liang Wenbo 5-2 in the last 16 before then dispatching Martin Gould 5-1.
O'Sullivan is Sky Bet's 5/4 favourite to win the tournament. Higgins can be backed at 4/1.
The other semi-final will be between in-form Judd Trump, who has yet to lose a frame, and Jack Lisowski.
Trump is second-favourite in Sky Bet's outright odds and outsider Lisowski can be supported to lift the trophy at 10/1.
World number three Trump beat Stephen Maguire 5-0 before seeing off Belgian Luca Brecel by the same scoreline to win a 23rd consecutive frame in the tournament.
Lisowski had edged out Northern Ireland's Mark Allen 5-4 in their third-round match, and then beat Norwegian Kurt Maflin 5-3 to secure a first semi-final appearance at a ranking event.
World number one Mark Selby, meanwhile, had earlier seen his hopes ended in the last 16 by Williams, who recorded a 5-3 win during Tuesday's morning session in Shanghai.
Thursday's results & Friday's schedule
THURSDAY NOVEMBER 16
Third Round (best of 9 frames)
- Mei Xi Wen 2-5 Kurt Maflin (Match 59)
- Mark Allen 4-5 Jack Lisowski (Match 60)
- Graeme Dott 4-5 Luca Brecel (Match 61)
- Stephen Maguire 0-5 Judd Trump (Match 62)
- John Higgins 5-2 Liang Wenbo (Match 63)
- Martin Gould 5-2 Marco Fu (Match 64)
- Barry Hawkins 0-5 Ronnie O'Sullivan (Match 65)
- Mark Williams 5-3 Mark Selby (Match 66)
Quarter-Finals (best of 9 frames)
- Kurt Maflin 3-5 Jack Lisowski (QF 1)
- Luca Brecel 0-5 Judd Trump (QF 2)
- John Higgins 5-1 Martin Gould (QF 3)
- Ronnie O'Sullivan 5-1 Mark Williams (QF 4)
FRIDAY NOVEMBER 17
Afternoon Session (0600 GMT)
Semi-Finals (best of 11 frames)
TV Coverage: Eurosport 1
- Judd Trump v Jack Lisowski
Evening Session (1130 GMT)
Semi-Finals (best of 9 frames)
TV Coverage: Eurosport 1
- John Higgins v Ronnie O'Sullivan
CLICK HERE FOR ALL THE RESULTS AND FULL TOURNAMENT SCHEDULE
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