Yu, who turned 13 in October, swam an impressive 2:07:41 to claim gold in the women’s 200 metre individual medley on Tuesday.
The schoolgirl from northern Hebei province beat the 2:07:57 her compatriot Ye Shiwen swam at the 2012 London Olympics, months before Yu was even born.
Yu’s time, met with huge cheers and gaping jaws from shocked spectators in Shenzhen, was the ninth fastest of all time.
It also made her the second fastest woman this year globally, behind only Canada’s world record holder Summer McIntosh.
She knocked nearly two seconds off her previous personal best time, set in Singapore in July.
Yu burst onto the world scene in Singapore by becoming the youngest swimmer in history to win a medal at the World Aquatic Championships, taking bronze as part of China’s 4x200m freestyle relay team.
She also finished fourth in each of her three individual events – the 400m medley, 200m butterfly, and 200m medley.
She is shaping as a major threat in future international competitions, including at the Los Angeles Olympic Games in 2028, if her times continue to progress.
Yu, who trains in Hebei and juggles swimming with her school work, took up the sport when she was six as a means of escaping China’s searing summer heat.
She first came to national attention last year and drew comparisons at home to Ye Shiwen, who at 16 became the youngest Chinese swimmer to win an Olympic medal when she triumphed in London.
“I’m very happy, very excited. I really didn’t expect I would achieve such a good result,” Yu told state broadcaster CCTV after Tuesday’s win.
Yu’s success generated huge attention in China, where she is already a star.
A hashtag related to her victory and new Asian record had garnered 11 million views on the social media platform Weibo by Wednesday afternoon.
However, she said she had “no feelings” about how to deal with the attention she gets from the public.
“Just doing my best is ok, and training hard,” she told CCTV.
Yu is due to swim the 400m medley on Monday, an event she won at China’s national swimming championships in May.