The Sponge Cities initiative in China is frequently described as a shift from using conventional grey infrastructure to a sustainable stormwater management (SSM) approach. However, it has been noted that Sponge City implementation includes conventional grey infrastructure too. Using the Sponge Cities initiative in China as a case, we examined how a prominent national policy is interpreted and implemented locally. We analysed national policy documents and conducted interviews with local government officials within three case cities. We found that in national policy documents, the Sponge City concept is related to the concept of low impact development, but that in implementation locally, conventional grey infrastructure still plays a significant role. Lack of space and lack of documented efficiency of green infrastructure were the most frequently mentioned reasons for this. Other challenges hindering its implementation were prioritization of quantifiable objectives within a short time-frame and lack of knowledge on SSM. Without sufficient resources (primarily space, knowledge and time), full implementation of the national Sponge City policy would be limited. In future efforts, finding the optimal combination of conventional and SSM solutions, viewing SSM and its management from a long-term perspective and promoting the understanding of SSM could help increase its implementation.