Ding won five ranking titles last season but has struggled for form for much of the current campaign, though he now has a chance to reach his first ranking final of the season.
In high quality quarter-final, Ding made breaks of 50, 79, 105 and 68, while Higgins made 86, 73 and 68. Both players had chances in a close decider and it came down to the colours, Ding potting blue and pink to win it.
"We both played well," said defending champion Ding. "I tried to make the most of every chance and didn't worry much about the scoreline.
"In the last frame I sat there and watched him play and thought I might not get a chance. Maybe it was luck that changed the outcome. I haven't won a match like that for quite some time."
World number 56 Wilson reached his first ranking semi-final with a 5-3 win over Barry Hawkins. From 2-1 down, Wallsend's Wilson won three frames in a row with a top break of 78. Hawkins pulled one back before Wilson sealed victory in frame eight.
"I'm really happy to have got to a semi-final," said Wilson. "Especially to play against Ding in China, it will be the biggest occasion of my career so far. I'm still struggling to find some real form, which sounds silly having got to the semis. I'm just hoping it comes tomorrow night.
"I hope I put in a good performance and don't let myself down. I'm enjoying it and I would love to go in and win the tournament."
Ball by ball scoring and results from tournaments