Top seed Rafael Nadal produced a whirlwind opener to beat Spanish compatriot Guillermo Garcia-Lopez 6-3, 6-2, while defending champion Andy Murray got a walkover into the third round after his Russian opponent Dmitry Tursunov retired with a thigh injury.
Frenchman Tsonga, still smarting from defeat by Czech Tomas Berdych in the Beijing semi-finals on Saturday, had hoped to pick up points to help him secure one of the eight places in the ATP world tour finals in London next month.
Nishikori, ranked 47th in the world, had other ideas, however, and, despite needing treatment from the trainer, came back from a break down in the third set to beat Tsonga, who started the week ranked eighth.
It was Nishikori's best performance at an ATP World Masters 1000 event and only his second win over a top-10 player in 11 attempts.
"Today my opponent was just better than me," Tsonga said. "I have more points than all my opponents (in the qualifying race) so, of course, for the moment I'm confident. I will take some rest and then I will come back to qualify."
With an unexpected day off, world number four Murray watched from the stands as Nadal whipped through his first set.
Nadal, clearly annoyed by noisy latecomers in the stands at the Qi Zhong Stadium centre court, tied the floundering Garcia-Lopez in knots with thundering forehands and backhand returns.
"I had a comfortable victory with two sets," said Nadal. "I didn't play my best match but it is unbelievable the conditions can change from Tokyo to here. The ball is completely different.
"Something must change because is too dangerous for the shoulders," he said, echoing Murray's complaints on Tuesday about constant changes of ball designs during the Asian swing of the ATP tour.
The 25-year-old Nadal, who lost to Murray in Sunday's Tokyo final, is eager to turn around what, by his high standards, has been a disappointing season and reclaim the rankings top spot from Serbia's Novak Djokovic, who is missing Shanghai because of injury.
So far this season, Nadal has taken three title wins from 10 finals, a dip in form from 2010 when he took seven from a possible nine.
Murray, who had a first-round bye, will now get his title defence underway in the third round when he plays Switzerland's Stanislas Wawrinka, the world number 19.
Third-seeded Spaniard David Ferrer overcame tenacious Canadian Milos Raonic 7-5, 7-6 in the second round while, in another all-Spanish battle, Juan Carlos Ferrero beat 16th seed Fernando Verdasco 4-6, 6-3, 6-2.
Sixth seed Berdych kept up the momentum from his Beijing title win to defeat compatriot Radek Stepanek 6-4, 6-3.
