Environmental concerns and potential social-economic impacts associated with fossil fuels have turned cities into indispensable entities for supporting energy transitions in China. Pursuing a transition towards a sustainable energy system has become a major policy concern for the Chinese central government. In response, and on the basis of a top-down and conformance-oriented system of policy implementation and evaluation, the Chinese central government has launched various policies and targets on energy efficiency and production that lower levels of government have to follow. However, the translation of top-down targets and the measurement of conformance-based targets have both proved to be problematic. This paper investigates Chinese state policy on energy efficiency through four empirical case studies. It identifies how policy design of target setting and evaluation is both impacting and driving the implementation of energy efficiency at the local urban scale. We demonstrate how local authorities are faced with constraining barriers that can inhibit the implementation of centrally issued targets and policies. These barriers may even undermine local performance in the pursuit of ambitious energy efficiency goals, resulting in potentially harmful consequences.