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Although Internet-based e-business has been developing very rapidly in Mainland China in the last 6 years, the following obstacles have hindered its development: 1. computer illiteracy and English illiteracy among elderly business decision makers; 2. incomplete understanding of the real sense of e-business; 3. insufficient technical and legal protection; 4. no sense of security and no trust in e -business; 5. insufficient human resources in information technology; 6. underdeveloped infrastructure and financial unavailability; 7. lack of a system of Certificate Authority, a national payment system and national credit system; 8. lack of a reliable and efficient logistic system; 9. lack of a unified national technology standard to guarantee interoperability; 10. uneven interregional Internet and e-business development. But if great importance is attached to these obstacles and effective measures are taken to overcome them, e-business in Mainland China will make more rapid progress. Otherwise, it will lag farther behind developed countries in this respect and China will be in a disadvantageous position in the era of information and knowledge-based economy. This paper at first reviews the e-business development in Mainland China, reveals the obstacles and challenges it is confronted with and puts forward some countermeasures to overcome them. Finally it concludes that the e-business future of Mainland China is promising in the coming years if the Chinese government on different levels acts as a strong regulator, an effective coordinator, an aggressive infrastructure builder, and an active e-business initiator and consumer.