The Masters champion, making his first appearance since the Ryder Cup, carded eight birdies in his blemish-free round at Sheshan International.
Fellow Americans Xander Schauffele and Tony Finau ended in a tie for second on six under with Sheffield’s Matt Fitzpatrick a shot further back.
Tommy Fleetwood was in a group of five on four under while defending champion Justin Rose was three under along with Ian Poulter and Matt Wallace.
Rory McIlroy finished on level-par 72, alongside new world No 1 Brooks Koepka, after battling to cancel out a double bogey and two bogeys with four birdies.
Reed, playing the back nine first, started superbly with birdies at the 11th and 12th and picked up two more shots before a run of three successive birdies after the turn saw him power ahead. He added another birdie on the ninth, his last.
The American said: “It felt really good. If you can go out and shoot rounds like that in these kind of conditions, you know you’re going to have confidence when the wind dies down and there are perfect conditions out there. Hopefully I’ll shoot a couple more of these rounds.”
Fitzpatrick has two top tens in three appearances in Shanghai but got off to a shaky start with bogeys on the 11th and 13th.
A first birdie of the day came on the next and he made five in a row from the 16th to surge up the leaderboard. Another dropped shot came on the third but Fitzpatrick birdied the seventh and eighth for a 67.