The feature of iron and steel manufacture process in China had been analyzed and the present status of direct reduction technology in China had been reviewed at first. The trend of direct reduction technology development has been given with consideration of natural resources in China. A 1.8Mt/a combined process of Shell coal gasification and HYL/Energiron direct reduction shaft has been proposed as an example. The parameters, technical and economic index of new process have been described as well. This article provided a scheme for the engineering of direct reduction which using synthesis gas as reducing agent.