The reform of China’s gas sector in the latter half of 2016 has been unprecedented. Since August, the government has released a series of directives to improve midstream regulation and accelerate the liberalisation of city-gate prices. The priority of these policies is to stimulate demand growth by reducing costs for users. China is well positioned to take advantage of lower Pacific Basin gas prices over the next five to six years. But it will also want to ensure domestic gas competitiveness to boost investments, create jobs, increase tax revenue and drive energy security. Reform is a balancing act between benefiting from low cost LNG imports and promoting a key domestic sector.