Faldo, who shot a four-under 68 on day one, which included a birdie blitz on the back nine, said his short game had let him down and he had three- putted on three occasions.
"Being eight shots back doesn't feel great right now after that round," said Faldo, who moved to seven under for the tournament after six holes but gave back five shots to finish joint 26th on two-under 142.
However, there was some cheer for British golf fans with the Dublin-born Paul McGinley (67, 70) and the Londoner Anthony Wall (69, 68) only three off the lead. And Colin Montgomerie is still in the hunt after finding some form and fortune with his putter to finish the day with a 67 and two-round total of 139 to lie five shots adrift of Campbell.
Ian Woosnam carded a second round one-under-par 69 to lie just a shot behind Florida's Gary Rusnak at the midway stage of the Hong Kong Open.
Rusnack made the most of the calm mid-morning conditions to fire a 68 for an aggregate of 134, but Woosnam stayed in contention on 135 alongside Sweden's Patrik Sjoland, who shot a best-of-the-day 65, the defending champion Kang- Wook Soon of South Korea (68) and the American overnight leader, Mike Cunning (70).
Sjoland went to the turn in three-under 31, and two birdies on the back nine rounded off a bogey-free round. "I had a good round today, better than yesterday, although I'm finding the greens tricky," said Sjoland. "If I keep playing like that I'm in with a chance of winning."
England's Peter Baker added a level-par 70 to his opening 67 to lie three shots off the pace on 137, the same total as Scotland's Simon Yates, who carded a 68 yesterday.