Schumacher, seven-time world champion, started from sixth on the grid but soon made up places on the Shanghai International Circuit in a race that was plagued by rain in the early laps.
Current world champion Alonso came second after starting from pole position, while Renault team mate Giancarlo Fisichella finished third after starting from second on the grid.
After recording his first victory in China, Schumacher praised his Ferrari team and looked ahead to the climax of the Formula One season.
"It is quite miraculous that we are here back in front after where we were a few months ago, but it is thanks to great work from everybody in the team that we have managed it," Schumacher said.
"Now we go into the last two races to see what happens and I believe we will have to go to the last one before a decision is reached.
"It is going to be an interesting couple of weeks and I am looking forward to it very much," he added.
The pressure is now back on a disappointed Alonso who is attempting to defend his title going into the final two races.
"The winner is Michael and he deserves the victory. Today we lost a big opportunity," the Spanish driver said.
"There were nine or 10 laps when I was completely off the pace and I think the race finished there.
"We have to look at the positives and see that we were very competitive and there are two races to go."
Even though Schumacher and Alonso are even on 116 points, the German holds top spot in the Drivers Championship as he has recorded one more race win than the Spaniard this season with a 7-6 lead.
Formula One now moves on to Japan for the penultimate race of the season next weekend, before finishing in Brazil on October 22.