Nalbandian, the world number seven, bludgeoned Federer in the first set with deep, powerful groundstrokes that skidded on the indoor surface of the futuristic Qi Zhong stadium.
The Argentine won the first of his three service breaks during the set with two consecutive groundstroke winners to the corners.
But Federer changed the rhythm of the game in the second set, bringing Nalbandian closer to the net and passing him. The Argentine started to make errors and after breaking serve in the first game of the second set, Federer dominated.
''I had to make him hit some errors -- he wasn't doing that at the beginning,'' the world number one told reporters.
The Swiss player won seven of his eight points at net but Nalbandian, frequently at full stretch, won just eight of 16.
Nalbandian beat Federer in last year's Shanghai Masters final, clawing his way back from two sets down. Federer has now won eight of their last nine meetings.
American Andy Roddick was due to take on Croatia's Ivan Ljubicic later today. The 3.7 million dollar, round-robin tournament pits the world's eight top-ranked players against each other.
REUTERS SAM RN1258