The winner of the last two grand slams, Djokovic has been unstoppable in recent months and crushed Zverev 6-2 6-1 to set up a final meeting with either Roger Federer or Borna Coric.
Regardless of the outcome of that clash, the Serbian will overtake Federer in the rankings and a return to the No.1 spot is unlikely to be far away if Djokovic maintains his superb form.
He had lost his only previous meeting with Zverev, in the 2017 Internazionali d'Italia final, and faced early pressure in this match as the youngster started strongly.
However, Djokovic was gifted a break of serve when Zverev's level dropped alarmingly in the sixth game, and the three-time champion in Shanghai soon wrapped up the opening set in ruthless fashion.
Zverev, who qualified for the ATP Finals with his quarter-final win over Kyle Edmund, was unable to stem the tide and his frustration got the better of him after he was broken again early in the second set.
After falling 3-1 down, the German angrily smashed his racquet, earning a code violation, before throwing it into the crowd.
Djokovic surprisingly let three match points go begging at 5-1 40-0, but took his fourth chance to wrap up the most emphatic of victories in exactly an hour.