In the women's draw, Maria Sharapova overcame eight double-faults, including four as she served for the match, to defeat Ana Ivanovic 6-0, 6-4. She will take on Petra Kvitova in the final after the Czech player beat Samantha Stosur 6-3, 5-7, 6-2.
It was Djokovic's third win over Murray this year and came just weeks after the Serb knocked him out of the quarterfinals of the U.S. Open in a hard-fought, 3 1/2-hour match.
Saturday's semifinal didn't quite reach the same level of quality — the two combined for 43 unforced errors and only 26 winners — but Djokovic proved the steadier player at the key moments and saved four of five break points he faced in the second set.
"It was a two-set victory today, but still it felt like I had to work hard to win the points," he said.
He'll play third-seeded Tomas Berdych of the Czech Republic in the final. Berdych won 6-4, 6-1 over Martin Klizan, the qualifier who upset Rafael Nadal in the quarterfinals.
Overall, Djokovic is on a 24-match winning streak in China, having also won the Shanghai Masters in 2012 and 2013. He has not lost in China since being beaten by Roger Federer in the semifinals in Shanghai in 2010.
He said he feels he's playing consistent tennis again after an up-and-down summer that saw him win his seventh Grand Slam title at Wimbledon and marry his long-time girlfriend, Jelena Ristic, then lose early at Cincinnati and Toronto.
"I just wasn't myself on the court. I wasn't really prepared emotionally to go back and compete again after Wimbledon and a very exhausting summer, everything that happened in my professional and private life," he said. "I'm glad that I'm back in the form that I would like to be in, especially in these courts where I still haven't lost ever since I played this tournament."
Despite the loss, Murray was also pleased with how he's been playing in Asia this month. The 11th-ranked Scot accepted wild cards to play in Shenzhen and Beijing to try to improve his ranking and qualify for the ATP World Tour Finals in London.
He won the title in Shenzhen last week and reached the semifinals in Beijing, playing eight matches in 10 days.
"It's been a couple good weeks for me," he said. "I got a lot of matches, some momentum. Obviously, I would have liked to have done a little bit better here. But I lost to the No. 1 player in the world. There's no disgrace in that."
On the women's side, Sharapova needed four match points — and a little luck — to close out her win over Ivanovic.
With Sharapova serving for the match at 5-4, the two played a nerve-wracking, 10-minute game featuring four double-faults and several wasted match and break points.
Ivanovic finally thought she got the break on her fourth chance when Sharapova's backhand went wide, but the Russian challenged the call and the ball was shown to have caught the line by a fraction. Sharapova hit an ace to set up her fourth match point and won it on an Ivanovic error.
"Definitely got tricky in the end," Sharapova said. "I didn't just give her a serve where she could attack because against me she's always played well when she has been behind because she's free and loose."
The third-seeded Kvitova will be going for her second title in as many weeks. She captured the inaugural Wuhan Open title last week, and will be going for her fourth of the season on Sunday in Beijing.
If she wins, she'll also leapfrog Simona Halep to move to No. 2 in the rankings.
"I'm quite tired already. A lot of matches in Wuhan and here," she said. "I'm looking forward to go to Europe. So I'm glad the final match is the last one here, then I can go."