Market mechanism on demand side response plays an important role on the new round of electricity reform in China. In order to develop the pathway of market mechanism which is suitable for demand side response in China, the differences between demand side management(DSM) and demand side response(DR) are analyzed. Then, several interactive modes, such as price-based DR, incentive-based DR and value-added services-based DR, are discussed. The multi-dimensional fuzzy description method is put forward to describe the multiple attributes of various DRs. Moreover, by introducing foreign electricity market experiences, the problems and opportunities of electricity market in China are analyzed. Several development proposals are also put forward in this paper.