The PGA Tour of Australasia tournament, which is co-sanctioned with the European Tour, has a purse of nearly $2 million.
Gillespie hit a five-under 67 today to finish at seven-under overall. His round included three birdies and an egale on the par-four 14th.
The other New Zealanders to have made the cut, Ryan Fox and Michael Long, were unable to advance up the leaderboard. Fox's even-par 72 left him in a tie for 29th at five-under, while Long is at even-par in a tie for 61st.
Denmark's Thorbjorn Olesen leads the field at 16-under.
Play was suspended in the second round of the latest LPGA tournament in China due to bad weather. Lydia Ko remains in a tie for 15th after Friday's first round.