Jack Ma, 1. China, 0. That seems to be the score in the unusually public tussle between the Alibaba billionaire and Beijing. Rarely does a mainland magnate push back when the Communist Party questions its business practices and ethics, and certainly not in the glare of the global news media. But Ma is standing his ground, and the government has dialed back its criticism of Alibaba selling fake goods on its e-commerce site.

This is not a sign that life is generally improving for private business in China, however. Abibaba is unique. Beijing loves a homegrown success story, and there's none better than Ma's fabled rise from schoolteacher to Asia's richest man. Since pulling off history's biggest IPO, Alibaba has become the standard bearer of President Xi Jinping's pledge to embrace capitalism, empower entrepreneurship and level the corporate playing field. Also, Ma is producing jobs at thousands of small-to-midsize companies and helping to accelerate Xi's shift to an economy led by consumer demand. Many countries obsess over companies that are too big to fail. For China, Ma is betting Alibaba is too important to hassle.

Yet there are many reasons why his juggernaut faces a difficult few years ahead. Here are the two most immediate challenges.