Sustainable consumption and production (or lack thereof) can leave very distinct marks at the city level. Among the cities aiming at sustainable development, resource-based cities (RBCs) are of special concern due to the tight interrelations economy, urban development, natural resources and environmental context have in them. Excessive exploitation and inefficient resource utilization often cause pollution and ecological risks. As natural resources are getting exhausted, their resource-based industries will collapse, threaten wider urban development and lead to economic recession. In this article, we focus on the economic and ecological dilemmas that the RBCs face in China. We first present an overview of China's policy implementation for rescuing and transforming RBCs. Then a particular RBC, Yichun, which is classified as “recessionary”, is analyzed to understand the challenges that it faces during its transition. The method of eco-efficiency is used to uncover Yichun's environmental performance in relation to its economic development. Subsequently, we explore the barriers in terms of industrial transformation, conflicts between national, provincial and local governmental actions, and the effects of the circular economy in Yichun. At the end of this article, we formulate several recommendations to facilitate Yichun's sustainable development. We propose that Yichun specifically needs to consider the energy consumption and pollution when selecting alternative industries. Furthermore, one-size-fits-all policies do not help to solve the problems in Yichun. Policies need to be contextualized locally through well-reflected coordination between higher and lower tiers of government.