The Chinese government has set an ambitious target: reducing China's energy intensity by 20%, or 4.36% each year between 2006 and 2010 on the 2005 level. Real data showed that China missed its target in 2006, having reduced its energy intensity only by 1.3%. The objective of this study is to evaluate the feasibility and potential of the Chinese to achieve the target. This paper presents issues of macro-economy, population migration, energy savings, and energy efficiency policy measures to achieve the target. A top-down approach was used to analyse the relationship between the Chinese economic development and energy demand cycles and to identify the potentials of energy savings in sub-sectors of the Chinese economy. A number of factors that contribute to China's energy intensity are identified in a number of energy-intensive sectors. This paper concludes that China needs to develop its economy at its potential GDP growth rate; strengthen energy efficiency auditing, monitoring and verification; change its national economy from a heavy-industry-dominated mode to a light industry or a commerce-dominated mode; phase out inefficient equipment in industrial sectors; develop mass and fast railway transportation; and promote energy-efficient technologies at the end use. This paper transfers key messages to policy makers for designing their policy to achieve China's energy efficiency target. (C) 2007 OECD/IEA. Published by Elsevier Ltd. All rights reserved.