The global upsurge in research and construction of smart grid is creating new opportunities and challenges to China's power industry. The research and practice of smart grid around the world， as well as the collaboration between smart grid and demand response（DR）， are summarized. Furthermore， from the perspective of DR， the issues on the collaboration between smart grid and DR are elaborated systematically， including the DR-related smart grid technologies and the collaboration benefits. Finally， suggestions and assumptions for achieving the collaboration between smart grid and DR are presented in view of the actual conditions of China's power industry.