China's energy sector transitioned into off-season mode in March. Gas and power demand growth dropped compared with the first two months. LNG imports remained strong in the first quarter, but high spot prices are beginning to erode demand from industrial and petrochemical sectors. Recognising the importance of reasonable energy pricing in increasing the competitiveness of its manufacturing industry, China wants to cut power tariffs for common industrial and commercial users. To make shale gas more affordable, China has also reduced the resource tax for shale gas development. China has been planning for the next heating season. Hebei province will shift its policy focus away from gas switching to electricity substitution this year. Electric heating using renewable energy is also crucial in the policy framework. The government has announced regulations to boost distributed wind and solar PV development by offering incentives. Clean and local heating initiatives will gain more traction.