The new economy has hit China, driven by the Internet and e-commerce. China has made a good start in both areas. However, the rapid growth of the sectors is constrained by factors such as a small base of registered users, high costs of using the Internet, government control of information access, and a lack of an effective distribution network and financial linkage. This study is intended for readers interested in China’s Internet and e-commerce sectors. It presents the historical development of the Internet and e-commerce in China, discusses their current market status and future growth, and considers the problems and issues facing the two sectors.