The 16-time Grand Slam champion is the oldest man to finish a season at the top of the rankings at the age of 31, after a year that saw him win the French and US Opens.
It is the fourth time the Spaniard has achieved the feat after 2008, 2010 and 2013.
Nadal went into the match knowing victory would give him an unassailable lead as world number one over old rival Roger Federer, after the Swiss legend withdrew before the start of the tournament.
Nadal will next face Pablo Cuevas in the last 16, after the unseeded Uruguayan edged out Albert Ramos-Vinolas 6-7 (5/7), 7-6 (7/1), 6-2.
Chung sent out an early warning of his intent with a ripping forehand winner to break Nadal in the third game.
The top seed responded, though, taking the next four games to open up a 5-2 advantage.
Nadal was broken when serving for the set as Chung hit back, but the turning point came as the world number one saved a break point in game 11, marked with a trademark fist-pump.
Any thoughts of a quick end to the match were set to one side when Chung staved off four break points early in the second set.
The world number 55 has enjoyed a breakthrough season in 2017 and will play at the inaugural Next-Gen Finals in Milan later this month, but his resistance was finally ended in the French capital as Nadal broke to move within a service hold of victory.
And he closed it out with the minimum of fuss to add another piece of history to his illustrious career.
The 20-year-old German lost his composure after easing through the first set, as his bid for a third Masters title of the season was abruptly ended.
It was the world number 43 Haase's first-ever win over a top-five player.
Home hope Lucas Pouille kept his slim hopes of qualifying for the World Tour Finals alive by seeing off Spaniard Feliciano Lopez 6-3, 6-4, but US Open runner-up Kevin Anderson's chances ended with a 5-7, 6-4, 7-5 loss to Fernando Verdasco.
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