Even in blustery conditions, Reed putted for birdie on every hole at Sheshan International and closed out his bogey-free round with a 25-foot birdie putt for an 8-under 64, giving him a two-shot lead over Tony Finau and Xander Schauffele.
Finau had led by three overnight at 11 under, but was two over through 12 on Saturday and saw Rose - who is looking to become only the second man after Tiger Woods to retain a World Golf Championships title - take charge at the top of the leaderboard.
Rose, who seized on a final-round collapse by 54-hole leader Dustin Johnson to win past year, looked sharp but was happy to escape with a 69 after he closed both the front and back nines with bogeys.
He is joined on the score by Northern Ireland's Rory McIlroy. "Hopefully I'll shoot a couple more of these rounds, I think that will help me out".
In the blink of an eye he was another three shots to the good as he started his back nine with a flourish, a final birdie at his last hole completing an impressive day for the Masters champion.
Reed, who unusually for a leading American has European Tour membership, is third behind Francesco Molinari and Tommy Fleetwood on the tour's Race to Dubai standings. "One thing I've learned in this game, you take the good with the bad and keep moving forward".
West Australian Brett Rumford finished on one-over-par 73 after a chequered run of birdies and bogeys, while Jason Norris carded a similarly frustrating 74.
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Reed opened with a pair of quick birdies in a swirling wind that came out of the opposite direction of the first round.
Brooks Koepka (T16): Only Schauffele fired a better round than Koepka on Sunday as the new world No. 1 shot a 3-under 69 to close out his first event as the top-ranked player in the world.
Finau, of Samoan and Tongan descent, is the first player of that ancestry on the PGA Tour and the first Polynesian to play in the Ryder Cup, where he provided a rare bright spot as a U.S. captain's pick in last month's crushing loss to Europe.
Rose, who came from eight shots back in the final round previous year to lift the trophy, was feeling good after not dropping a shot all day on the way to a five-under 67.
Matt Fitzpatrick had five straight birdies to overcome a rough start and post a 67.
His only PGA win so far was the 2016 Puerto Rico Open.
This was Finau's first tournament of the season and like a year ago, he went home with a second-place finish.