Transmission doesn’t shift into neutral but all gears work
 

Just got bike together and started. Warmed up and on first ride all gears work. I come back and think it’s in neutral (neutral light even lights up), but as I release clutch it begins to surge forward.

I try to upshift and go back down and then try to go to neutral but still in gear.

After I turn off engine I can feel it shift into neutral. Bike rolls forward no resistance.

What is going on?

You need to ride it a few hundred miles .

It's a combination of needing to break it in, technique, and also clutch adjustment. You might need to reduce slack on your clutch cable.

They all do this to a greater or lessor degree. Try shifting it into neutral before you come to a dead stop, say at walking pace

As far as the neutral light coming on, pfft, my digital gauge does that all the time.

These guys are probably right. Adjust your clutch cable and especially if you live where it's cold, you might consider a lighter weight oil. This can help with clutch drag too.

Sweet Spot
 

Most "China Bikes" have very finicky neutral positions. You have to find that sweet spot between gears 1 and 2. I have a Bashan Storm 250 and it's kind of a pain to get in neutral sometimes. I just put it into 1st gear and GENTLY tap my toes up. You'll feel it when it drops into neutral, it's hard to explain. Just play with it and get to know your bike. Also, they do need to break in a bit before shifting properly!

At a standstill or off the bike it takes a few tries to “snap” in to N. Rolling and as long as you don’t shift to far and it clicks right in.

Are you riding with boots or sneakers? I know with my sneakers I can feel the shifts and it’s easier to get the bike in neutral. When I’m riding with my boots as you should , it’s more difficult to feel the shift. It will get better as your bike breaks in. The clutch may need to be adjusted as others have said. Make small adjustments to the cable tension at a time. When you get it right you’ll know it.

old honda design - its the exact same feel on MB5. and yes there will be times the neutral is green and its in first..... crazy but true :P

With my ZongShen Sierra and most other bikes I've ridden, it's easier to get in neutral from 2nd, e.g. when coming to a stop. A very gentle push down from 2nd will easily get it into N, esp. with a bit of residual forward motion.


Going from 1st to N however is much harder: for one the "distance" between 1st and N seems to be greater than that between N and 2nd, and the shifter is also much "stickier". What often happens is the shift lever suddenly jumping into 2nd as you struggle to push it upwards from a standstill. It's very hard to get the amount of force just right to a) "unstick" from 1st and b) Just baaarely land into N without touching 2nd.