After a slow first practice on a soggy morning in Shanghai, the drivers were busy in the afternoon under overcast skies, with Schumacher edging out Lewis Hamilton on the timesheets.
Hamilton had gone quickest in the morning session, but was just under two-tenths adrift of the German veteran's best effort on softer tyres and low fuel, set midway through the session.
The Red Bull duo of Sebastian Vettel and Mark Webber were third and fourth respectively, while Nico Rosberg took fifth place ahead of the McLaren of Jenson Button.
Kamui Kobayashi was a hundredth of a second quicker than Paul Di Resta to finish seventh, while the Scot's team-mate Nico Hulkenberg was ninth, and Fernando Alonso was again some way off the pace in 10th.
When the racers turned to longer race simulation stints in the latter part of the session McLaren once again looked strong, with Hamilton and Button running at a similar pace.
Mercedes' softer tyres appeared to suffer a drop-off in performance, though their run on the harder tyres was stronger.
Alonso, the current championship leader against the odds, dragged his Ferrari around on the race stint at more than a second a lap slower than his rivals, while Felipe Massa was even further back, having set a best time that was only good enough for 17th place.
The Red Bulls ran no more than half a dozen laps at a time at the end of the session, making a judgement on their race pace difficult.
Almost all the drivers suffered tyre lock-ups on the bumpy Shanghai circuit, with Timo Glock having the most unnerving accident of the session.
The Marussia driver lost his nose cone as he hit a bump going into turn one, running straight off the track and into the barrier.
He was unhurt, but with the drivers struggling there and the hairpin at turn 14, there is still much to be done to get set-ups right for Saturday's qualifying session.