The escalating demand for electricity in China has caused an electricity shortage in the past several years. This paper discusses the role of demand response (DR) as an integral component in alleviating the problem and coping with this shortfall. It reviews current experience with DR programs, analyzes China's situation and makes suggestions for DR implementation. Although China's DR programs offer high potential to succeed, they require substantial efforts in resolving such key issues as the programs' funding mechanisms, pricing, and relationship with electricity industry reform. Published by Elsevier Ltd.