By the end of 2015, every second Chinese will have access to the Internet. The ability of an increasing number of Chinese people to communicate and consume online has inspired a wide array of scholarship on topics such as censorship, surveillance and the use of social media. While much of this research is premised on the notion of antagonistic state-society relations, the impact of state-sponsored and Internet-based channels of communication between government officials and Chinese individuals on the transformation of China’s one-party authoritarian regime remains poorly understood. This article addresses this issue by examining China’s e-government strategy in relation both to global developments and to the changing incentives that have driven political reform in China in the past two decades. It argues that the confluence of two challenges has benefited the integration of the Internet into China’s governance apparatus. The first challenge was that avoiding the Internet would have come at prohibitive economic cost. If economic development was to continue, there was no way past the Internet. The second challenge was China’s brittle governance apparatus at the time, which hindered economic development and was deemed unfit to meet the demands of an increasingly assertive population.