Saina, who was ensured of the world no. 1 during her exploits at the India Open triumph, defeated Yao 21-13 21-9 in a lop-sided 30-minute women's singles to set up a clash with another Chinese shuttler, Sun Yu, ranked 15th in the world.
However, it was curtains for Commonwealth Games champion Parupalli Kashyap and Indonesian Masters winner H S Prannoy in men's singles competition.
Prannoy, who jumped three places to 14th after his giant-killing exploits at the India Open, went down to two-time Olympic champion Lin Dan of China 15-21 14-21 in another men's singles match that lasted 52 minutes.
Commonwealth Games silver medallist Jwala Gutta and Ashwini Ponnappa, too, suffered a loss in the second round, going down fighting 23-21 8-21 17-21 to sixth seeded Indonesian pair of Nitya Krishinda Maheswari and Greysia Polii in a close to an hour match.
Olympic bronze medallist Saina hardly broke a sweat against Yao in the first round as she led from start to finish. The closest the Chinese could come was 11-12 but the Indian soon changed gears and marched ahead to lead 1-0.
In the second game, Saina broke off at 3-3 and slowly but steadily surged ahead to eventually close it without much ado at the Putra Stadium.
A win tomorrow will pit Saina against either world no. 2 Li Xuerui or fifth seed Wang Yihan, whom she had beaten at the All England championship last month.