Research on the Evolution Characteristics of Policy System That Supports the Sustainability of Digital Economy: Text Analysis Based on China’s Digital Economy Policies

Abstract

The high-quality and sustainable development of the digital economy cannot be achieved without the support of the policy system. The purpose of this article is to scientifically analyze the laws and characteristics of the policy system that supports the sustainability of the digital economy. Specifically, based on public policy theory, this article constructs an analytical framework of “policy objectives—policy tools—organizational management” and incorporates the “central-local” relationship with Chinese characteristics into the framework. Meanwhile, text analysis was used to quantitatively analyze 971 digital economy policies issued by the central and local governments in China from 2000 to 2022. Research shows that the central government of China has taken the lead in introducing digital economy policies, and local governments are able to respond quickly. The central government’s digital economy policy goals fluctuate and change, while local governments pay more stable attention to the digital product service industry. Both central and local governments widely use supply oriented policy tools and environmental-oriented policy tools, while demand-oriented policy tools are not widely applied. The vertical relationship between central and local data management agencies is still unclear, and the degree of cross departmental and cross regional cooperation is not high. Meanwhile, empirical analysis based on the two-way fixed effects model shows that technological innovation, R&D funding, and industrial structure have a significant impact on changes in digital economy policies. This article summarizes the characteristics of the evolution of digital economy policies in the Chinese context, providing policy design references for promoting the sustainability of the digital economy and methodological insights for policy research in other fields.

1. Introduction

The digital economy, as the predominant economic form in the new round of technological revolution, is transforming our ways of living and working at an unprecedented pace and propelling human society to accelerate its transition towards a digital and intelligent future. The digital economy can not only promote technological innovation and improve re-source utilization efficiency but also facilitate a better balance between society, the environment, and the economy and promote global progress towards sustainable development goals [1]. From a global competitiveness perspective, the deep evolution of the digital economy is also rapidly reshaping the global economic landscape, providing potential directions for accelerating global economic integration and achieving shared development [2]. The digital economy has become the new main theme of international competition, as well as the economic battlefield of major powers in the new technological revolution. How to achieve sustainability in the digital economy and promote long-term stable economic growth is an important issue of concern for major developed countries around the world.

Currently, China, the US, and Europe form a tripolar structure in the development of the global digital economy. As a data powerhouse, China accounted for 10.5% of global data production in 2022, ranking second in the world. In terms of industry size, infrastructure, and market scale, China’s digital economy demonstrates significant competitive advantages and sustainability trends. The fact shows that the high-quality and sustainable development of China’s digital economy cannot be separated from the support of a scientific and effective policy system. The Chinese government places great emphasis on top-level designs and institutional mechanism construction for digital economy development, incorporating the digital economy into the national development framework. Both the central government and local governments have formulated a series of digital economy plans and introduced various policies and regulations to promote the sustainability of the digital economy. In order to support and achieve high-quality and sustainable development of the digital economy, it is necessary to conduct scientific research on the characteristics and laws of China’s digital economy policy system.

At present, the existing literature has conducted extensive and comprehensive research on enhancing the competitiveness of the digital economy, forming five main research routes. Firstly, some researchers focus on empirical research on digital technology, data elements, and the consequences of the digital economy. Digital technology innovation is an important lever to enhance the international competitiveness of the digital economy, and the efficient utilization of data elements can also achieve effects such as trade upgrading, green development, and service optimization [3,4,5]. Secondly, some studies focus on measuring the scale and competitiveness of the digital economy and conducting country-specific analysis [6]. Based on the big data cloud platform, an accurate measurement of the scale of the digital economy can be achieved [7], and the digital economy can enhance the competitiveness of manufacturing exports, service exports, low-carbon trade, etc. [8,9]. Thirdly, some studies focus on the promotion path and development ideas of the digital economy [10,11,12]. Some studies suggest that well-designed competitions, regulations, intellectual property protection, and consumer privacy policies can improve market performance in the digital economy [13,14,15]. Fourthly, the focus is on the relationship between the digital economy and sustainable development. The digital economy is gradually becoming a new engine for urban sustainable development [16]. Researchers have focused on examining the relationship between the digital economy and carbon dioxide emissions and believe that green technology innovation by enterprises is an important channel for promoting environmental sustainability [17,18,19]. Some researchers have paid attention to the role of the digital economy in the social sphere and found that it can effectively regulate the impact of aging on the sustainability of pensions [20]. Of course, while products and services based on digital technology can promote sustainability, they can also bring about issues such as electronic waste, high energy consumption, and increased carbon emissions [21]. Fifth, some studies focus on the sustainability of the digital economy itself. Researchers generally emphasize the need to build green digital infrastructure, promote the deep integration of digital technology and the real economy, prevent technological and ethical risks, and improve the level of digital governance [22,23]. It is necessary to improve the policy framework for promoting the sustainability of the digital economy, including policy incentives and constraints, technological innovation policies, and privacy protection policies [24]. Of course, some studies have also discussed the characteristics and trends of China’s urban digital economy policies, dividing them into stages. It has been found that policy types lack predictive policies; policy timeliness lacks specific policies; policy guarantees are unevenly used, and policy goals lack comprehensive coverage [25,26,27]. Based on the quantitative analysis of digital economy policies in Heilongjiang Province, it was found that their digital economy policies are mainly based on guiding policies, with insufficient richness in policy types, participants, and incentive measures; strong limitations in policy timeliness; insufficient cooperation among issuing institutions [28]; and research focusing on specific areas of digital economy policies, such as a quantitative evaluation of digital economy policies in the tourism industry [29]. There are also international comparative studies on digital economy policies, including the characteristics of digital economy policies in the United States and the European Union, as well as Singapore’s digital economy governance plan [30,31,32,33,34].

From the existing research, it is evident that the technology, characteristics, development, and policies of the digital economy have been discussed to some extent, aiding our understanding of China’s digital economy institutional practices and governance framework. However, there are still shortcomings in current research: First, there is a lack of systematic policy text analysis. The frequency of words in policy texts can reflect the “attention” that the government invests in specific goals. Policy text analysis helps us understand the focus and temporal changes in policies and thus provides a better grasp on the characteristics and laws of relevant policies. This is the unique advantage of using policy text analysis to study digital economy policies. Currently, China’s digital economy policies are frequently introduced, and a considerable amount of texts has been accumulated to support the quantitative analysis of policy texts. Second, the analytical perspective is singular, lacking a multidimensional framework to compare digital economy policies issued by the central and local governments in China. Third, there is a lack of temporal dynamic analysis of digital economy policies, making it hard to accurately grasp the characteristics and evolution of digital economy policies at different time points. This article aims to make certain compensations and contributions in the above three aspects.

Specifically, the main research objectives of this article are threefold: (a) to construct a three-dimensional analysis framework of “policy objectives—policy tools—organizational management” based on classical theories of public policy in order to scientifically and systematically analyze the laws and characteristics of the policy system that supports the sustainability of the digital economy; (b) introduce the method of quantitative analysis of policy texts to design a targeted policy analysis dictionary for the digital economy, thereby extracting features and patterns of digital economy policies from a large number of policy texts; and (c) consider the “central-local” relationship with Chinese characteristics, compare and analyze the design of China’s digital economy policies, summarize the rules and characteristics, and provide reference for policy design in other countries.

2. Theoretical Background and Analytical Framework

2.1. Theoretical Basis and Research Hypotheses

The sustainable development of the digital economy involves multiple aspects such as technology, the economy, society, and law, and a supportive policy system also needs to consider these factors. In the design of digital economy policies, it is necessary to integrate these factors into multiple aspects such as policy goal setting, tool selection, and coordination among multiple stakeholders. Therefore, studying the policy system of the digital economy requires returning to the classic theories of public management and public policy. From an economic perspective, public policy aims to correct market failures through government interventions. In the process of digital economy development, market failures may appear in more complex and hidden forms. For example, the natural monopoly of platform economy, the monopoly of key data resources, privacy infringement and data abuse, spillover effects of technological innovation, and insufficient supply of digital infrastructure [35,36]. Based on this, it is necessary to guide and address potential market failures through digital economy policies to ensure the healthy development and sustainability of the digital economy.

2.1.1. Theory of Policy Objectives and Agenda Setting

An important aspect of digital economy policy design is to accurately identify market failures in the development process of the digital economy and use this as the goal of a digital economy policy. Policy objectives are the goals that policy activities aim to achieve and are the core of a policy. Policy objectives fundamentally refer to the outlook, design, and conception of the prospects for solving policy problems by policy subjects based on a comprehensive understanding and evaluation of the nature, scope, impact, causes, and process of specific policy issues [37]. Policy objectives are the incentives for policy activities and determine the direction of policy activities. From an external structural perspective, policy objectives are composed of policy objective projects and policy objective values. At the same time, the design and adjustment of policy objectives also involve agenda setting, which is the first and most critical link in the policy process. The direction and outline of the policy are determined in this process. The important theories regarding agenda setting include Kingdon’s multi-source flow analysis framework and Cobb and Ross’s three major models [38,39,40]. The adjustment of agenda focus also determines the change in policy objectives.

Specifically in the field of the digital economy, an in-depth analysis of the internal structure and basic characteristics of digital economy policy objectives can help grasp the essence and laws of digital economy development. The policy goals are not fixed. For example, in 2000, China began to focus on Internet infrastructure and e-commerce. In 2010, we began to promote the “Internet plus” strategy to foster mobile payments and a sharing economy. After 2020, we shifted towards high-quality development, focused on 5G AI and Industrial Internet, built a data element market system, and strengthened digital governance capabilities. Both existing studies have shown that policy objectives will dynamically adjust with technological iterations and external shocks (such as pandemics and geopolitical conflicts) [41,42]. The evolution of digital technology will stimulate adaptive social innovation, which in turn will affect the adjustment of social and policy goals [43]. Policy decisions in the digital age are also cyclical, just like the development of information technology [44]. Therefore, hypothesis 1 is proposed.

Hypothesis 1 (H1): 

the goals of China’s digital economy policies vary significantly at different times.

2.1.2. Theory of Policy Tools

The achievement of digital economy policy goals requires the use of scientific and effective policy tools. The policy tool theory holds that policy is a combination of basic tools that can reflect the laws of decision-making [45]. The classification of policy tools is an important part of policy tool research, which includes distinguishing them based on the intensity of government administrative interventions and government guidance methods, as well as spectral classification of policy tools based on their degree of compulsion and classification based on different subjects of policy tools [46]. Among them, Rothwdl and Zegveldt classify policy tools into supply, demand, and environmental types, which can effectively cover various action carriers of digital economy policies [47].

As an emerging field of the digital economy, policy tool theory has important explanatory power. The development of the digital economy requires scientific and rational policy tools, which can help address challenges posed by complex policy environments and diverse stakeholders. In terms of the development practice of China’s digital economy, the use of policy tools is gradually upgrading, including early financial and tax incentives, infrastructure investment, and now the basic system of data elements and special legislations, reflecting the different focuses of policy tools. Policy tools will be specially constructed and constantly changing according to the needs of different political issues and political propositions [48]. The long-term use of the same type of policy tools can lead to deviations between actual implementation effects and policy ideals, and the balance between different types of policy tools and policy coordination mechanisms should be strengthened [49]. In the field of the digital economy, the differentiated combination and dynamism of this policy tool are more critical [50]. Therefore, hypothesis 2 is proposed.

Hypothesis 2 (H2): 

China’s digital economy policy chooses different combinations of policy tools at different times.

2.1.3. Theory of an Institutional Collective Action Framework

In the design of digital economy policies, the collaboration and cooperation among policy subjects determine the effectiveness of subsequent policy implementation. The theory of an institutional collective action framework was proposed by Professor Feiock at Florida State University in the United States to consider the fragmented management brought about by regional administrations [51]. The main research object of the institutional collective action framework focuses on government departments, with particular attention to cooperation issues among government departments under fragmented administrative systems. For example, when providing public services, horizontal cooperation difficulties often arise due to negative externalities across departments and regions. There are often vertical cooperation difficulties between different levels of government. In fragmented-specific government functions and policy areas, there may be functional cooperation dilemmas [52].

The functional design of the digital economy regulatory authorities is particularly important, playing a crucial role in the formulation, implementation, supervision, and evaluation of digital economy policies. Currently, the development of China’s digital economy involves multiple departments, levels, and regions. The fragmentation of government functions and organizational decentralization may affect the effectiveness of digital economy policies. For example, the widespread existence of government data silos in China has led to redundant construction and reduced service efficiency. The fragmented management model of the Chinese government has been extensively discussed in the literature, including “decentralized authoritarianism” and “fragmented authoritarianism” [53,54], and the problem of power decentralization and coordination between departments has long existed [55]. The governance system of China’s digital economy is inevitably influenced by the government’s departmental structure. Therefore, hypothesis 3 is proposed.

Hypothesis 3 (H3): 

the functions of China’s digital economy sector are relatively dispersed and incomplete.

2.1.4. Policy Implementation Theory

Policy implementation is a necessary means to achieve policy objectives. According to research characteristics and models, policy implementation research can be mainly divided into three stages: The first generation is a “top-down” model, emphasizing the extraordinary position of policy makers and advocating for the rational design of policy implementation frameworks and norms by policy makers. The second generation adopts a “bottom-up” model, focusing on the executive layer and emphasizing the functional interaction and parallel cooperation between policy formulation and policy implementation. The third generation is an integrated model that emphasizes multidimensional interaction among policy makers, implementers, and other stakeholders in a dynamic landscape [56,57,58]. The theory of policy implementation provides important guidance for us to consider the relationship between digital economy policies at different levels.

The development of the digital economy requires collaboration and cooperation among entities at different levels, and digital economy policies also need to receive positive responses at different levels. In terms of China’s digital economy policies, the central government coordinates the overall strategy, while the local governments focus on local adaptation, resulting in policy differences due to hierarchical power and responsibility. The relationship between the central and local governments in China is unique. This relationship is different from both decentralized autonomy under a federal system and vertical control under a traditional unitary system [6,59]. But through the dynamic balance mechanism of “centralized leadership flexible authorization”, it promotes the coordination of policy flexibility and unity [60,61]. Therefore, the relationship between the central and local governments with Chinese characteristics will also exhibit a “controllable elasticity” feature in digital economy governance. That is to say, local governments not only need to respond to central policies but also have differences. Therefore, hypothesis 4 is proposed.

Hypothesis 4 (H4): 

there are significant differences in digital economy policies between the central and local governments in China at different times.

2.2. An Analysis Framework for Digital Economy Policies

According to the above theoretical basis, policy objectives, policy tools, and policy subjects are the key contents of digital economy policy analysis. Therefore, this article constructs a three-dimensional analysis framework for digital economy policies from “policy objectives—policy tools—organizational management” (Figure 1). It should be noted that the division of the three dimensions in the analysis framework, namely the objective dimension, the tool dimension, and the organizational dimension, is not only the main direction of policy analysis but also conducive to us describing the structural characteristics of the digital economy policy system more clearly and logically. Of course, there may be some cross connection between the three dimensions. We fully consider this situation and avoid it through meticulous dictionary construction, such as avoiding the same type of keywords from appearing in different dimensions.

2.2.1. X Dimension: Policy Objectives

Digital economy policy objectives are both the goals set by the government and the outcomes of digital economy evolution. In the digital economy era, the synergistic development of digital industrialization and industrial digitization constitutes the core domains of the digital economy. The 14th Five-Year Plan for Digital Economy Development emphasizes achieving significant progress in industrial digital transformation and substantial enhancement in digital industrialization. Therefore, this paper adopts digital industrialization and industrial digitization as the dimensions of policy objectives for the digital economy.

2.2.2. Y Dimension: Policy Tools

Policy tools are among the most widely used instruments in policy text analysis. Policy tools are categorized into three types: supply oriented, demand-oriented, and environment-oriented [47]. In the context of digital economy policies, supply oriented tools promote digital economy development through factors such as technology, funding, and infrastructure. Demand-oriented tools stimulate development from a market perspective, such as cooperation and trade. Environment-oriented tools ensure digital economy development through measures related to finance, taxation, and security. This paper adopts this classification to conduct an in-depth analysis of digital economy policy tools.

2.2.3. Z Dimension: Organizational Management

As mentioned in the basic theory section, the functional design of the digital economy regulatory authorities is particularly important and plays a crucial role in every aspect of the development of the digital economy. Among them, there may be factors such as the fragmentation of government functions and organizational decentralization that affect the effective implementation of digital economy policies [25,62]. Therefore, this paper examines the integrity and centralization of the functions of digital economy governance agencies as the organizational dimension.

2.2.4. Comparative Analysis of Central and Local Policies

Existing research on digital economy policies has paid limited attention to the similarities and differences between central and local policies, potentially overlooking the vertical interaction characteristics of digital economy policies within the Chinese context. This paper incorporates the “central-local” relationship into the analytical framework for the following reasons: Comparing central and local digital economy policies helps identify the connections and differences in terms of objectives, tools, and organizational structures. This analysis enables the central government to better assess the implementation of local digital economy policies, thus enhancing its guiding role in digital economy development. It also aids local governments in benchmarking their policies against central policies, reducing deviations in their efforts to promote the digital economy and ensuring that local initiatives align with the national context to effectively achieve policy objectives.

3. Research Design

3.1. Selection of Digital Economy Policy Samples

The analysis object of this study is the digital economy policy text, and the factors such as the period, scope, quantity, and quality of policy sample selection determine the scientificity of policy analysis and the credibility of conclusions. Therefore, this article has developed a very clear policy sample collection path. (1) Select a policy sample library: The digital economy policies in this article mainly come from the “Peking University Treasure Law and Regulation Database”. This database is a comprehensive website of Chinese laws and regulations and is currently the most authoritative, mature, professional, and advanced legal and regulatory retrieval system in China, with an average of over a thousand policy updates per day. This database basically covers all authoritative digital economy policy texts. At the same time, in order to avoid possible omissions, this study also searched for relevant policies on the websites of various departments of the Chinese central government and local governments one by one. (2) Determine the search keywords: The “Peking University Treasure Law and Regulation Database” has clearly divided various policies. This article sets up two types of search boxes, namely “keywords” and “titles”, and conducts searches based on keywords such as “digital”, “digital economy”, “digitalization”, “digital technology”, and “digital industry”. The collection deadline was 1 October 2023. Finally, 1293 search results were obtained, all of which were authoritative legal regulations and policy documents. (3) Policy sample cleaning: this study conducts a thorough inspection and cleaning of policy makers, policy content, and policy types to avoid issues such as policy duplication and omissions. (4) Determine the time period for analysis: This study conducted policy analysis over a longer time span, with a selected time period of 2000–2022. The main consideration is that China’s policy design is closely related to the political process. Around 2000, digital technology began to gradually gain attention in China. In 2022, the 20th National Congress of the CPC was held. Selecting these two time points can help determine a relatively complete policy timeline.

After the above steps, 971 final effective policy samples were obtained, including 57 central policies and 894 local policies, covering all provincial administrative regions in Mainland China. It should be noted that the policy samples obtained through this collection path already contain important policies related to the digital economy, which can effectively support policy quantification analysis. For example, some emerging digital technologies or industries may have special policies, but this does not affect our overall judgment of the evolution characteristics of China’s digital economy policy development.

Table 1. Selected digital economy policy text samples.

Policy Name	Issuing Authority	Date
Opinions on Accelerating Digital Economy Development	CPC Guizhou Provincial Committee and Guizhou Provincial Government	April 2017
Zhejiang Province’s Five-Year Doubling Plan for the Digital Economy	General Office of Zhejiang Provincial Government	September 2018
Policies to Accelerate Digital Industrial Development via Industrial Internet	Lanzhou Industrial and Information Technology Commission	January 2019
Beijing Action Plan for Promoting Digital Economy Innovation and Development (2020–2022)	Beijing Municipal Bureau of Economy and Information Technology	September 2020
Guidelines for Foreign Investment Cooperation in the Digital Economy	Ministry of Commerce, Cyberspace Administration of China, and Ministry of Industry and Information Technology	July 2021
Measures to Accelerate the Development of Software and Emerging Digital Industries	Xiamen Municipal Government	March 2022

provides examples of selected policy samples.

3.2. Text Analysis and Dictionary Construction

3.2.1. Text Analysis Method

This study employs a text analysis method to encode, categorize, and quantitatively analyze digital economy policy texts. Using R software 4.3.2, 971 policy texts were analyzed. Text analysis combines qualitative and quantitative approaches, primarily through keyword frequency statistics to quantify policies [63]. The frequency of keywords in policy texts reflects the government’s “attention” to specific goals. This method is widely used to analyze policy evolution in fields such as higher education, industrial development, technological innovation, and environmental protection [64,65].

3.2.2. Logic of Dictionary Construction

The core of text analysis lies in the construction of a keyword dictionary. For the policy objective dimension of the digital economy, the Classification of Digital Economy and Core Industries (CDECI) issued by the National Bureau of Statistics in 2021 systematically outlines the digital economy and its core industries, providing technical support for constructing the dictionary for analyzing digital economy policy texts. In terms of the policy tool dimension of the digital economy, a wealth of empirical studies on the development of policy tool theories has provided documentary support for the construction of a keyword dictionary. Additionally, the organizational dimension analysis of digital economy policies mainly employs a grounded theory method based on policy texts, and therefore, keyword coding for the organizational dimension was not established. The logic of dictionary construction is explained below:

A.

Primary Coding: Broad Category Classification

First, the dimensions of policy objectives for the digital economy are divided into two categories: industrial digitization and digital industrialization. Second, the policy tool dimension of the digital economy is categorized into three types: supply oriented, demand-oriented, and environment-oriented.

B.

Secondary Coding: Subcategory Classification

Firstly, there are two types of secondary codes for the policy objectives of the digital economy. Digital industrialization includes digital product manufacturing, digital product service, digital technology application, and digital factor driven industries. Industrial digitization includes improving digital efficiency. Secondly, the secondary coding for the policy tool dimension draws on the common measures and characteristics of digital economy policies proposed in existing research. Among them, supply oriented tools include five categories: infrastructure, financial support, talent resources, information resources, and core technologies. Demand-oriented tools include five categories: government procurement, regional cooperation, international exchanges, pilot projects, and platform construction. Environment-oriented tools include seven categories: financial support, tax incentives, organizational structures, information security, strategic services, intellectual property, and regulatory frameworks.

C.

Dictionary Entries: Keywords for Frequency Statistics

The keywords for the policy objective dimension are primarily derived from the third-level classifications of digital economic activities in the CDECI. By splitting and merging these classifications, a total of 189 keywords were identified. The keywords for the policy tool dimension were obtained through frequency analysis of policy samples and a review of related academic papers on policy tool keywords, resulting in a total of 548 keywords.

In summary, the paper constructed a keyword dictionary for the textual analysis of digital economy policies, comprising 5 broad categories, 22 subcategories, and 737 keywords, as shown in

Table 2. Coding for the digital economy policy dictionary.

Dimension	Primary Coding	Secondary Coding	Example Keywords	Count
Policy Objectives	1. Digital Industrialization	(1) Digital Product Manufacturing	Computer manufacturing and information security devices	62
		(2) Digital Product Services	Computer software and communication equipment retail	17
		(3) Digital Technology Applications	Software development and internet data services	28
		(4) Digital Resource-Driven Industries	Internet retail and security system monitoring	29
	2. Industrial Digitization	(5) Efficiency Enhancement Industries	Smart agriculture and e-government systems	53
Policy Tools	3. Supply Oriented Tools	(6) Infrastructure	Cloud computing and intelligent facilities	36
		(7) Funding Support	Policy funding and research funding	25
		(8) Talent Resources	Talent training and recruitment systems	60
		(9) Information Resources	Data sharing and open data policies	28
		(10) Core Technologies	Blockchain, big data, and AI	29
	4. Demand-Oriented Tools	(11) Government Procurement	Service outsourcing and public procurement	7
		(12) Regional Cooperation	Regional cooperation and tech partnerships	31
		(13) International Exchanges	Digital Silk Road and global partnerships	25
		(14) Pilot Demonstrations	Model enterprises and industry benchmarks	11
		(15) Platform Building	Digital innovation platforms	43
	5. Environment-Oriented Tools	(16) Financial Support	Venture funds and M&A investment	51
		(17) Tax Incentives	R&D tax deductions and tax exemptions	21
		(18) Organizational Structures	Coordination groups and leadership roles	21
		(19) Information Security	Data security and privacy protections	60
		(20) Strategic Services	Public awareness campaigns and policy advocacy	35
		(21) Intellectual Property	Patent protection and copyright enforcement	17
		(22) Regulatory Frameworks	Funding oversight and system regulations	48

. Of course, it should be noted that the categories and keywords of the dictionary constructed in this article are not expected to fully cover all elements of the digital economy (which cannot be achieved in a single study). We determine the dictionary elements based on a three-dimensional analysis framework, integrating policy practices and the existing literature to ensure the achievement of our research objectives.

4. Finding and Discussion

4.1. Basic Situation and International Comparison of Digital Economy Policies

4.1.1. Basic Situation of Digital Economy Policies

The term “digital economy” gained attention after the publication of The Digital Economy: Promise and Peril in the Age of Networked Intelligence by American scholar Don Tapscott in the 1990s [66]. Entering the 21st century, the concept of the “digital economy” began to appear in domestic policies and the academic literature to a certain extent. Considering the relatively recent emergence of the concept, this study adopts a yearly scale to compare the developmental trajectory of central and local digital economy policies. To present an overall picture of China’s digital economy policies at both central and local levels, the first-level coding categories (broad categories) of the dictionary are analyzed. Based on the frequency of occurrence of these categories, Figure 2 illustrates the temporal variations in the classification of central and local digital economy policies from 2000 to 2022.

According to Figure 2 (top panel), before 2014, “Digital Industrialization” received sporadic attention in central policies, while “Industrial Digitization” and related policy tools were not significantly emphasized. Starting in 2014, and especially by 2017, digital economy policies gained substantial importance, showing a gradual upward trend thereafter. This shift can be attributed to the emergence of the digital economy as a new economic and social development paradigm in China’s policy framework. During the 2016 G20 Hangzhou Summit, China advocated for the formulation of the G20 Blueprint on Innovative Growth, emphasizing “seizing digital opportunities, addressing digital challenges, and advancing a prosperous and vibrant digital economy”. At the same time, digital security, the digital economy, and sustainable development was also included in the discussion agenda. Subsequently, the 2017 Chinese Government Work Report proposed to promote the accelerated growth of the digital economy and enhance its ability and level of sustainability. Notably, 2016 marked a turning point for central-level digital economy policies, with increasing attention to sectors such as digital services and digital manufacturing, alongside a marked rise in the visibility of related policy tools.

In contrast, discussions on digital economy policies at the local level emerged later. According to Figure 2 (bottom panel), prior to 2017, local policies paid limited attention to the digital economy. Beginning in 2018, however, “Digital Industrialization” and related policy tools gained rapid prominence, exhibiting an exponential rise in keyword frequency. This trend reflects the swift response of local governments to the “promoting the accelerated growth of the digital economy” directive in the 2017 Government Work Report, resulting in its implementation at the local policy level. Further comparisons between the dimensions of digital economy policy objectives and policy tools reveal the following: Before 2018, central policies primarily focused on “Digital Industrialization” and related objectives, with limited discussion at the local level. After 2018, the proportion of keywords related to policy tools grew significantly. Overall, local governments demonstrated a high degree of alignment with central policies in their attention to the digital economy. However, they initially showed insufficient focus on development objectives, while later placing greater emphasis on the use of “Supply-oriented Tools”.

4.1.2. International Comparison of Digital Economy Policies

Furthermore, this article reviews the digital economy development strategies and policy documents of some developed countries and regions in the past decade and summarizes the main characteristics and important tools of digital economy policies (

Table 3. Characteristics of digital economy policies in some countries and regions.

Country/Region	Main Features	Focus on Key Areas and Policy Tools
America	Emphasize innovation strategy, take the lead in popularizing the concept of digital economy, and was the first to lay out digital economy planning	Building an innovative ecosystem; strengthen the collaborative cooperation between industry, academia and research; loose regulation; leading industry standards; supporting small and medium-sized enterprises; implement tax incentives; expand financing channels; strengthen intellectual property protection; promote international cooperation and trade
Britain	Drive socio-economic development through digital innovation and clarify the construction of a digital powerhouse	Increase capital investment; emphasize brand culture; focus on areas such as mobile communication networks, the Internet of Things, enterprise service transformation, and data analysis
Germany	The anti-monopoly regulation of the digital economy is at the forefront of the world	Economic anti-monopoly regulation; pay attention to consumer protection; effective regulation of data monopoly behavior
Japan	The digital strategy is closely related to economic security policies	Emphasize the security of digital technology products; strengthen the construction of export control capacity; tightening talent policies; establish a multi-level technology alliance; strengthening international cooperation
Singapore	Ranked 1st in global competitiveness in the field of digital economy regulation	strengthen talent, technology, regulation, and digital infrastructure construction; pay attention to externalizing domestic digital rules
European Union	Leading in the ability to regulate and govern the digital economy and orderly construction of the digital single market	Pay attention to market norms and competition regulation; building a unified digital governance framework; emphasize digital security, transparency of platform rules, and privacy protection; focus on fields such as big data, artificial intelligence, cloud computing, e-commerce, etc.
ASEAN	Emphasize long-term planning and clarify the establishment of the ASEAN Digital Economy Community by 2045	Building a secure and robust digital governance framework that guarantees the rule of law; promote cross industry collaboration and multi-party sharing and co-construction; pursuing inclusive growth and digital equity

). Overall, the countries and regions in the table attach great importance to the strategic layout of the digital economy, with the United States taking the lead in popularizing the concept of the digital economy and ASEAN focusing on formulating development plans by 2045. However, there are significant differences in the direction of digital economy development and policy tool choices among different countries. For example, the United States attaches great importance to innovation strategies and therefore uses more supply side and environmental policy tools, including research and development investment, tax incentives, expanding financing channels, and strengthening intellectual property protection. Germany, Singapore, and the European Union focus on strengthening regulations in the digital economy sector by using more environmentally friendly policy tools. On the contrary, Japan and ASEAN place greater emphasis on international cooperation, rulemaking, and talent support, guiding the development of the digital economy through demand-driven policy tools. Compared with the aforementioned countries and regions, China’s digital economy started relatively late but has grown rapidly. By comprehensively using three types of policy tools, the phased policy goals are very clear, which can provide policy references for other countries and regions. Singapore and Germany both emphasize strengthening the regulation of the digital economy, while the United States attaches great importance to innovation investment. These are all good experiences. It is worth noting that both ASEAN and the UK have set long-term development goals for the digital economy and attach great importance to promoting the creation of a sustainable and inclusive environment. The inspiration for China is to establish more long-term and stable planning goals, which is conducive to promoting the sustainability of digital economy development.

4.2. Analysis of Digital Economy Policy Objectives

Industrial digitization and digital industrialization are two core objectives of digital economy policies, both emphasizing sustainability, but with different focuses and approaches. Among them, the focus of industrial digitization lies in the “industry”, which is a key link in promoting the sustainable development of traditional industries. In the digital age, traditional industries are undergoing digital and intelligent transformation [67]. The organic integration of traditional industries and digital technology is not only beneficial for the sustainable development of traditional industries but also enables the digital economy to gradually mature as a new economic form.

The key to digital industrialization lies in “digital”, which is an important driving force for the sustainability of the digital economy. Specifically reflected in three aspects, in the economic dimension, digital industrialization reconstructs the value chain with data elements, cultivates new driving forces such as artificial intelligence and cloud computing, and enhances total factor productivity. In the environmental dimension, green digital technologies (such as edge computing and smart energy systems) enable carbon emission reduction and promote a circular economy. In the social dimension, the universalization of digital infrastructure and skills training narrows the digital divide and achieves inclusive growth. Overall, China’s digital industrialization goals revolve around these aspects. However, compared to policy goals in the economic and environmental dimensions, the attention given to the social dimension is still insufficient. Below, we will analyze the characteristics of China’s digital economy policy goals and the differences between the central government and local governments around these two aspects.

4.2.1. Education and Healthcare as Primary Goals: Divergence in Central and Local Priorities

Table 4. Objectives of industrial digitalization in central and local digital economy policies.

Ranking	Central Digital Economy Policies	Local Digital Economy Policies
1	Smart Education	Smart Education
2	Smart Healthcare	Smart Healthcare
3	Internet-based Real Estate	Digital Culture and Tourism
4	Digital Capital Market Services	Environmental Management
5	Intelligent Transportation	Municipal Facility Management
6	Digitalized Facility Cultivation	Smart Warehousing
7	Smart Logistics	Specialized Equipment Manufacturing
8	Smart Warehousing	Smart Logistics
9	Digitalized Leasing	Digitalized Water Conservancy
10	Smart Agriculture	Digital Forestry

presents the types of industrial digitalization emphasized by central and local policies, with keyword frequency rankings reflecting their level of importance. The results indicate that smart education and smart healthcare are key focus areas in both central and local industrial digitalization policies, revealing the policy support behind their rapid development. However, there are differences in the priorities of central and local policies. Central policies place greater emphasis on sectors like internet-based real estate, digital capital markets, intelligent transportation, and smart agriculture. Local policies, on the other hand, focus more on digital culture and tourism, environmental management, municipal facility management, smart logistics, and digital forestry. This indicates that macro-level industries such as agriculture, capital markets, and real estate receive more attention from the central government. Meanwhile, local governments prioritize mid- and micro-level traditional industries like cultural tourism and infrastructure, aligning with the practical needs of localized industrial digitalization development.

Furthermore,

Table 5. Key areas of focus for digital economy policies in some cities.

Sort	Shanghai	Beijing	Shenzhen	Chongqing	Guangzhou
1	Big data center	Industrial internet	Industrial internet	Industrial internet	Industrial internet
2	Smart healthcare	Digital infrastructure	Big data center	Big data center	New infrastructure
3	Industrial internet	Network infrastructure	Information infrastructure	Information infrastructure	5G base station
4	Smart education	Smart healthcare	Network infrastructure	Smart healthcare	Information infrastructure
5	New infrastructure	Smart education	Innovative infrastructure	5G base station	Equipment manufacturing
6	Digital infrastructure	Digital culture and tourism	Communication network infrastructure	Innovative infrastructure	Integrated circuit design
7	Network infrastructure	Big data center	Digital infrastructure	Digital infrastructure	Smart healthcare
8	Information infrastructure	Information infrastructure	Smart healthcare	Smart education	Internet infrastructure
9	Transportation infrastructure	New infrastructure	Computing infrastructure	Integrated infrastructure	Smart education
10	Equipment manufacturing	Computing infrastructure	Equipment manufacturing	New infrastructure	Computing infrastructure

presents the key industries of focus for some cities’ digital economy policies. The steps taken to obtain these results are as follow: Select the top five cities based on the 2022 Gross Domestic Product (GDP) ranking. Count the frequency of keywords related to digital economy policies in these five cities and select the top ten industries. It can be found that, in addition to the common focus on smart education, smart healthcare industries, and other industries, different cities have their own priorities. For example, Shanghai pays more attention to the construction of new infrastructure. Beijing places greater emphasis on the industrial Internet and digital culture and tourism. Shenzhen prioritizes innovative infrastructure. Chongqing focuses more on 5G base stations and integrated infrastructure. Guangzhou gives greater importance to Internet infrastructure. This is also related to the industrial advantages, development models, and other characteristics of these cities.

4.2.2. Central Policy Goals Show Greater Variation, with a Focus on Digital Product Services

Figure 3 depicts the temporal evolution of the objectives in central and local digital economy policies. Key findings include the following: (1) Central policies exhibit greater variability. Before 2018, central digital economy policies leaned towards “Data Elements Driven Industry”, focusing on platforms for internet production services, life services, technological innovation, and public services. This aligns with the “Internet+” development phase. Post-2018, there is increased emphasis on “Digital Product Service Industry”, “Digital Product Manufacturing Industry”, and “Digital Technology Application Industry”, targeting areas like wearable smart devices, service robots, and 3D printing technologies. (2) Local policies focus heavily on the “Digital Product Service Industry”. Since 2018, when local governments began focusing on the digital economy, the “Digital Product Service Industry” has emerged as a dominant area of emphasis. This encompasses aspects like wholesale, retail, leasing, and the repair of digital products. Both central and local policies place significant emphasis on the “Digital Product Service Industry”, which aligns closely with the demands of economic development. As a vital pillar of the dual-circulation strategy, innovation in digital product services drives the supply of high-quality digital products, fostering a powerful impetus for new productive forces [68]. This emphasis is further echoed in the 20th National Congress of the Communist Party of China, which called for the establishment of a high-quality and efficient modern service system. (3) There are differences in policy evolution before and after 2018. Before 2018, local digital economy policies were sparse and lacked clear objectives, while central policies were in a phase of exploration and adjustment, marked by fluctuations in policy goals. After 2018, with the frequent issuance of digital economy policies by both central and local governments, their policy objectives demonstrated a more concentrated growth trend.

4.3. Analysis of Digital Economy Policy Tools

Policy tools promote and support the sustainability of the digital economy through differentiated pathways, requiring classified policies to balance efficiency, equity, and environmental goals. Among them, supply side policy tools can directly break through the supply bottleneck of green digital technology through technology research and development investment and infrastructure layout, laying a material foundation for the low-carbon transformation of industries. Demand-based policy tools leverage market incentives and consumption guidance to cultivate society’s acceptance of sustainable digital products and services, forming an iterative cycle of technology application and market feedback. Environmental policies reconstruct market rules through institutional constraints and standard setting, internalizing external costs through mechanisms such as carbon pricing and information disclosure, thereby forcing companies to consider environmental benefits in their decision-making.

At the same time, the temporal effects of the three types of policy tools show significant differences. For example, in the budding stage of technology, supply oriented policy tools are relied upon to break down initial barriers; in the stage of scale expansion, demand-oriented tools are needed to stimulate market vitality, and in the mature and stable stage, environmental policies are relied upon to maintain competitive order. Therefore, in order to achieve an effective combination of policy tools and build a closed-loop regulation mechanism of “technology supply market response rule constraints”, the dynamic balance between the growth momentum, social inclusiveness, and ecological carrying capacity of the digital economy can be achieved, and the goal of sustainable development of the digital economy can be achieved. The following will introduce the characteristics and laws of China’s digital economy policy tools one by one, as well as the differences between the central government and local governments.

4.3.1. Supply Side Policy Tools: Variations in Stability, with a Unified Focus on Core Technologies

Figure 4 illustrates the temporal changes in supply side policy tools for central and local digital economy policies. Above all, a clear difference in the stability of the application of supply oriented policy tools between central and local governments can be observed. From 2013, the central government began to significantly utilize supply side policy tools, primarily focusing on “Information Resources”, “Core Technologies”, and “Infrastructure”. These efforts concentrated on data sharing, artificial intelligence, and mobile internet technology development, embodying a digital technology-driven development orientation for the digital economy. With the intensive issuance of digital economy policies, the visibility of related supply side policy tools markedly increased, yet it exhibits a “wave-like rise” trend. This indicates that digital economy development is still in a deep exploratory phase, and the application of policy tools remains in gradual adjustment. A clear trend is the growing emphasis on “Core Technologies”, particularly the research and application of 5G, big data, cloud computing, artificial intelligence, blockchain, and human–computer interaction technologies, while financial support receives relatively less emphasis. This is closely related to China’s innovation strategy. In recent years, China has placed greater emphasis on core technologies to ensure autonomy, controllability, and competitiveness. For example, Huawei has broken through the monopoly of operating systems, while SMIC has tackled key technologies in chip manufacturing.

In contrast to the “wave-like upward” trend of central supply side policy tools, local supply side policy tools show a steadily increasing and concentrated trend. Since the rapid rise in local digital economy policies in 2018, the use of supply side policy tools has remained generally stable. In recent years, these tools have predominantly centered on “Core Technologies”, reflecting the importance local governments place on using technologies such as big data, cloud computing, and artificial intelligence to build software platforms and technical frameworks for digital economy development. Meanwhile, “Infrastructure”- and “Information Resources”-related policy tools account for a high proportion of entries, underscoring a digital platform and technology-driven development orientation. For example, Guizhou Province is building a big data center; Zhejiang Province is promoting the “maximum one run” reform, and Shenzhen is laying out 5G networks. This helps to solidify the foundation of digital development and activate the potential of digital elements. In addition, local policies differ from central policies in that they place greater emphasis on “Financial Support”, prioritizing research funding, special grants, and incentive subsidies to promote the growth of digital entities and accelerate the development of the digital economy. For example, Beijing has set up a special science and technology fund to support AI enterprises; Shanghai has launched the “Smart Investment Plan” to subsidize digital infrastructure; Hangzhou power generation companies have received live streaming rewards, and Hefei has set up a billion-dollar integrated circuit industry fund. The possible explanation for this difference is that under market failure, digital technology research and development has high risks and long cycles, requiring government funding guidance. Moreover, intensified regional competition has forced local governments to use fiscal leverage to seize industrial highlands and drive transformation and upgrading.

4.3.2. Demand-Side Policy Tools: Promoting Digital Economy Development Through Pilots and Platform Construction

Figure 5 shows the temporal changes in demand-side policy tools for central and local digital economy policies. Both central and local demand-side policy tools exhibit relatively noticeable fluctuations. From 2015, demand-side policy tools related to international exchange account for a high proportion of entries, indicating a strong emphasis on leveraging “International Exchange” policy tools to drive the initiation and development of the digital economy. This includes a focus on guiding cross-border data, cross-border trade, coordinated openness, and open cooperation. This may be influenced by the global trend of digital economy development at that time. In 2015, the global digital economy accelerated its integration, and China needs to integrate into the international industrial chain through open cooperation to avoid technological isolation. For example, establishing the Hangzhou Cross border E-commerce Comprehensive Pilot Zone, promoting the construction of the “Digital Silk Road”, participating in WTO e-commerce rule negotiations, and promoting cross-border data flow and trade facilitation are necessary. Since 2018, there has been increased attention to pilot demonstrations and platform construction, such as promoting digital economy development through potential enterprises, leading firms, demonstration zones, and pioneer areas and reinforcing the foundation of the digital economy through e-government cloud platforms, industrial technology innovation platforms, and data-sharing platforms. During this period, the digital economy has entered the stage of large-scale application, where pilot projects can verify the model and reduce risks, and platforms can integrate elements and activate the ecosystem. For example, the establishment of digital economy innovation and development pilot zones in China is based on this consideration. Domestic regional cooperation, led by digital economy alliances, has also garnered a certain level of attention. The digital economy alliance can break down administrative barriers and promote factor flow and collaborative innovation. For example, the joint construction of a digital city cluster in the Yangtze River Delta and the exploration of cross-border data cooperation among Guangdong, Hong Kong, and Macao are major strategic arrangements made by the central government.

Similarly, local digital economy demand-side policy tools initially focused on “International Exchange” but later shifted to prioritizing “Pilot Demonstrations” and “Platform Construction” for digital economy development. For example, Xiong’an City explores digital twin cities; Zhejiang Province builds an “urban brain”, and Haier enterprises build industrial Internet platforms. Local policies also exhibit distinctive features, such as placing greater emphasis on “Government Procurement” and “Regional Cooperation”. For example, the early adoption of digital economy applications in public administration is facilitated through service purchases and outsourcing, promoting the development of the local digital economy.

4.3.3. Environmental Policy Tools: Common Focus on Information Security and More Diverse Tools in Local Policies

Figure 6 illustrates the temporal changes in environmental policy tools for central and local digital economy policies. Entries related to “Information Security” constitute a significant proportion and exhibit rapid growth. Information security has emerged as a focal point of both central and local environmental policy tools. With the rapid development of the digital economy and the widespread application of big data, cloud computing, and artificial intelligence technologies, network security and data security have become critical components of national security [69]. This is closely related to the reality of the development of the global digital economy. Frequent incidents affecting digital security, such as global data breaches (such as Facebook user privacy incidents), intensified cyberattacks (such as the Colonier pipeline ransomware incident), and cross-border data sovereignty games (EU GDPR coming into effect), have forced countries to strengthen information security. Thus, issues such as cloud security, big data security, IoT security, data security, privacy protection, and cross-border data safety are the most prominent concerns in central and local digital economy policies. These policies advocate for measures like security assessments, monitoring and warning systems, security reviews, and joint regulatory mechanisms to fortify the network and data security foundations for digital economy development.

Additionally, there are evident differences between central and local environmental policy tools. Local digital economy environmental policy tools are more diverse. In addition to aligning with central policies’ focus on information security, local policies pay greater attention to tools such as “Organizational Construction”, “Policies and Regulations”, and “Financial Support”. Specifically, local policies emphasize strengthening organizational leadership through coordinated leadership, responsibility allocation, policy linkage, and performance evaluations. Moreover, technical standards, regulatory rules, incentives, and support policies are often used as measures to promote the development of the digital economy. For example, Shenzhen has introduced China’s first regulations to promote the digital economy; Hangzhou has set up a data resource management bureau to coordinate development, and Suzhou has issued digital consumption vouchers to activate the market. These measures help to break down departmental barriers, regulate market order, and make up for financing gaps.

4.4. Analysis of the Organizational Dimensions of Digital Economy Policies

Collaboration among functional departments related to the digital economy is crucial. Under the bureaucratic framework, the “fragmented authority” caused by traditional functional segmentation can easily lead to target conflicts and resource dissipation in policy implementation. The functions of the digital economy management department are relatively centralized and complete, which helps to build a cross-level and cross-departmental governance network and assist in maintaining the sustainability of the digital economy. For example, at the vertical level, the central coordination of basic rules can curb bottom-up competition among localities. Horizontally, it can promote data sharing and reduce institutional transaction costs. In order to evaluate the characteristics of the main functions of digital economy governance, this section adopts a grounded policy text analysis method to track the organizational dimension analysis of central and local digital economy policies.

4.4.1. Decentralized Management Institutions: Urgent Need to Clarify Central–Local Data Institution Relationships

Before the digital economy was explicitly mentioned in the 2017 Government Work Report, the “Digital China” initiative served as China’s strategic framework for the development of the digital data sector. The Central Cyberspace Affairs Commission is the top-level design body for the “Digital China” initiative, and it is responsible for the overall design, layout, coordination, advancement, and supervision of network security and informatization efforts. Major strategic planning and policy-making in specific fields under “Digital China” are executed by agencies such as the Office of the Central Cyberspace Affairs Commission, the National Development and Reform Commission (NDRC), and the Ministry of Industry and Information Technology (MIIT), based on their respective duties. Meanwhile, responsibilities for industrial digitization, digital industry construction, digital infrastructure, e-government, and data security are distributed across the NDRC, MIIT, the Office of the Central Cyberspace Affairs Commission, the General Office of the State Council, national security agencies, and public security agencies. This resulted in a fragmented management model involving multiple departments and their subdivisions.

With the digital economy strategy formally incorporated into the Government Work Report, relevant policies were swiftly introduced. To enhance coordination, the State Council General Office approved the establishment of the Inter-ministerial Joint Conference on Digital Economy Development in July 2022. Comprising 20 departments and led by the NDRC, this mechanism facilitated collaboration among departments but remained as a decentralized governance model. In March 2023, the 20th CPC Central Committee’s Second Plenary Session approved the Party and State Institutional Reform Plan, which led to the creation of the National Data Bureau. This new body is responsible for coordinating data infrastructure, as well as the planning and development of “Digital China”, the digital economy, and digital society. It consolidated relevant functions previously spread across the Office of the Central Cyberspace Affairs Commission and the NDRC, thereby partially addressing the governance challenges of a fragmented top-level design. Prior to the establishment of the National Data Bureau, several regions had already created specialized departments for data resource development, utilization, and sharing. For instance, Beijing, Zhejiang, and Sichuan, as well as cities like Guangzhou, Chengdu, and Xiamen, had established data-related departments. These local data institutions are established in various ways, including reorganizing government departments, endowing existing departments with dual functions, or directly setting up affiliated institutions controlled by the government.

Before the establishment of the National Data Bureau, digital economy management at the central level was characterized by numerous lines of authority, fragmented responsibilities, and difficulties in departmental coordination and operational progress. Although local governments carried out extensive exploratory efforts and established data-related agencies, the vertical relationship between central and local data institutions remained ambiguous. Even with the formation of the National Data Bureau to consolidate responsibilities for data resource integration and utilization, a scientifically structured vertical data management framework is still lacking.

4.4.2. Numerous Involved Departments and Insufficient Cross-Departmental and Cross-Regional Coordination

A network analysis of issuing authorities provides insights into the state of cross-departmental and cross-regional collaboration in central and local digital economy policies. Figure 7 illustrates the proportion of joint policy issuances by central and local governments. Among the 971 policy samples analyzed, several key findings emerge. First, central digital economy policies involve more than twenty units, including the General Office of the State Council, the Cyberspace Administration of China, the National Development and Reform Commission, NDRC, MIIT, the Ministry of Finance, and the Ministry of Education. Among these policies, 57.89% are issued independently; 35.09% are jointly issued by two departments, and only 7.02% are jointly issued by three or more departments. Second, local policies involve a wider range of departments, such as the General Offices of local governments, the bureaus of industry and information technology, development and reform commissions, finance bureaus, and big data centers. In local policies, 68.68% are independently issued; 29.31% are jointly issued by two departments, and only 2.01% are jointly issued by three or more departments. Third, policies involving cross-regional coordination are even rarer, accounting for less than 1%. This limitation may hinder the cross-regional flow of data resources and the collaborative development of the digital economy across regions. In summary, both central and local digital economy policies involve a large number of functional departments, yet cross-departmental and cross-regional collaboration remains limited, with a notable characteristic being significant decentralization. This confirms hypothesis 3. The main reason behind this is the “departmentalism” under the fragmentation of administrative systems. Specifically, this is reflected in the solidification of functional divisions, differences in assessment objectives, and the lack of a unified data-sharing mechanism and an interest coordination platform. For example, departments such as Industry and Information Technology, the Cyberspace Administration, and the Development and Reform Commission each have their own focus, and the phenomenon of “data silos” is common in local areas. Although the Yangtze River Delta advocates collaboration, mechanisms such as fiscal and tax revenue sharing have not been broken through, weakening overall efficiency.

4.4.3. The Continuity of Policies in Some Areas Is Not Strong, and There Are Differences Between Central and Local Policies

Based on the changes in policy objectives and tools in the digital economy, it can be seen that the continuity of policies in some areas is not strong, and there are differences between central and local policies. According to the results shown in Figure 3, in the objective dimension of digital economy policies, compared with local policies, central policies exhibit relatively weaker policy continuity in the digital element-driven industries and digital product service industries. There were noticeable fluctuations in 2009 and 2020, and particularly significant disruptions occurred in 2013 and 2014. Figure 4, Figure 5 and Figure 6 show the basic situation of digital economy policy tools. The continuity of supply oriented and environment-oriented policy tools in local policies is generally satisfactory, while demand-oriented policy tools have experienced significant changes since 2018. In central policies, the continuity of the three types of policy tools is relatively weak, especially in the fields of core technologies, talent security, international exchanges, and information security, which have experienced significant fluctuations since 2018. One possible reason for this is that there were significant institutional adjustments at the central level in 2018, including the restructuring of the Ministry of Science and Technology, which affected the policy arrangements for related functions.

4.5. Empirical Analysis of the Evolution of Digital Economy Policies

4.5.1. Verification of Annual Differences in Digital Economy Policies

According to the descriptive statistical results mentioned earlier, there are significant differences in the goals and policy tools of digital economy policies at both the central and local levels in different periods, and in some years, there have even been turning points. This change can be very intuitively reflected in the curve trajectories of Figure 3, Figure 4, Figure 5 and Figure 6 which strongly support hypotheses 1 to 4. However, more rigorous and scientific statistical results are still needed.

Therefore, this paper compares the annual differences between two types of policy objectives and three types of policy tools at the central and local levels. For example, taking the goal of digital industrialization at the local level as an example, we attempt to use analysis of variance to test whether the differences in the number of keywords related to digital industrialization between 2000 and 2022 have statistical significance.

Table 6. Annual variance test based on analysis of variance.

Type	Annual Differences in Policy Targets				Annual Differences in Policy Instruments
	Digital Industrialization		Industrial Digitalization		Supply Oriented		Demand Oriented		Environment Oriented
	Central	Local	Central	Local	Central	Local	Central	Local	Central	Local
Z value	0.92	2.49 ***	1.90 **	2.75 ***	11.98 ***	18.99 ***	11.50 ***	24.11 ***	16.84 ***	32.36 ***
Period (year)	23	23	23	23	23	23	23	23	23	23

Note: *** p < 0.01, ** p < 0.05.

shows the annual variance test based on the analysis of variance. It can be observed that in terms of policy objectives for the digital economy, except for the coefficient of digital industrialization at the central level, which is not significant, all other coefficients are significant (at the 1% and 5% levels). The possible reason is that the goal of digital industrialization is relatively stable at the central policy level, and although there may be differences in quantity and content between years, the overall direction is consistent. However, local policy goals have significant differences, partly due to regional differences and partly because local goals have relatively smaller constraints and more flexible adjustments. This indicates that the annual differences in policy objectives are statistically significant, and hypothesis 1 is partially supported.

In terms of digital economy policy tools, both at the central and local levels, the coefficient is significant at the 1% level, indicating that the annual differences in policy tools are statistically significant, and hypothesis 2 holds true. A possible explanation is that the accelerated iteration of digital technology and market environments requires policy tools to keep up with the times, which has also been validated in some of the previous cases. Furthermore, by comparing the coefficients, we can see that there is a significant difference in coefficients between the central and local levels, especially in the three categories of digital industrialization, demand-based policy tools, and environmental policy tools, thus validating hypothesis 4. This also indicates that there are differences in the magnitude of changes in digital economy policies between the central and local levels. This result is also in line with reality. The flexibility of policy changes between the central and local governments may result in differences in outcomes.

4.5.2. Analysis of Driving Factors for the Evolution of Digital Economy Policies

In order to further explore the driving factors of changes in digital economy policies, this paper focuses on analyzing the impact of economic development, industrial structure, technological innovation, government finance, and household consumption on the evolution of digital economy policies. Firstly, describe the dependent variable. Using the number of keywords related to two types of policy objectives and three types of policy tools as the dependent variables, the changes in the number of keywords reflect the changes in attention during different periods. Secondly, explain the variables. Based on the economic and social factors related to the development of the digital economy, five main explanatory variables are determined, namely the proportion of the tertiary industry to the gross domestic product, fiscal revenue, the household consumption level, the number of domestic invention patent applications accepted, and R&D funding investment, representing industrial structure, the fiscal level, the consumption level, and technological innovation, respectively. Thirdly, control the variables by selecting variables such as population, area, economy, and infrastructure for each provincial administrative region. This paper uses a two-way fixed effects model based on panel data for empirical analysis. The time period is 2000–2022, and the regions are 31 provincial administrative regions in Mainland China. The data for explanatory and control variables are sourced from national statistical yearbooks over the years. To ensure that the variable distribution tends towards a normal distribution, logarithms are applied to all variables.

Table 7. Regression analysis based on two-way fixed effects model.

Explanatory Variables	Policy Objectives		Policy Tools
	Number of Keywords Related to Digital Industrialization	Number of Keywords Related to Industrial Digitalization	Number of Keywords Related to Supply Oriented Tools	Number of Keywords Related to Demand-Oriented Tools	Number of Keywords Related to Environment-Oriented Tools
The proportion of the tertiary industry	0.042 ***	0.226 *	0.008 **	0.007	0.003 **
Fiscal revenue	0.005	0.019 **	0.004 ***	0.002 **	0.013
Residents’ consumption level	0.016	0.246	0.017**	0.007	0.011
Number of domestic invention patent applications accepted	0.031 ***	0.015	0.026 *	0.011 *	0.018 *
R&D funding	0.006 **	0.001 *	0.004 **	0.002 *	0.002 **
Number of samples	710	710	710	710	710
R squared	0.173	0.314	0.449	0.453	0.269
Control variables	yes	yes	yes	yes	yes
Region fixed effects	yes	yes	yes	yes	yes
Year fixed effects	yes	yes	yes	yes	yes

Note: *** p < 0.01, ** p < 0.05, and * p < 0.1.

reports the regression results of the impact effects of changes in digital economy policy objectives and policy tools. The results show that for both types of policy objectives, the proportion of the tertiary industry and the coefficient of R&D investment are significantly positive, indicating that the adjustment of policy objectives is influenced by industrial structure and R&D investment. Among them, the number of domestic invention patent applications accepted has a significant positive impact on digital industrialization, indicating that the level of technological innovation is crucial. The significant positive impact of fiscal revenue on industrial digitization indicates that traditional industries require strong financial support to accelerate their integration and development with digital technology. For the three types of policy tools, the coefficients of the number of domestic invention patent applications accepted and R&D funding investment are significantly positive, highlighting that technological innovation and R&D investment will affect the choice of policy tools. In addition, the use of demand-based tools is more affected by fiscal revenue, while the use of supply based tools is closely related to industrial structure and environmental tools.

Overall, changes in digital economy policies are influenced by technological innovation, research and development investment, industrial structure and are also related to fiscal revenue and residents’ consumption levels. Analyzing the influencing factors of policy changes in the digital economy can help us further grasp the direction and reasons for policy changes and make policy adjustments that are more in line with regional realities.

5. Conclusions

Realizing the sustainability of the digital economy is crucial for enhancing economic competitiveness and requires a scientific and efficient policy system to support it. This article takes China’s digital economy policy as the research object. It employs a three-dimensional analytical framework of “policy objectives, policy tools, and organizational management” to conduct a textual analysis of 971 digital economy policy documents from the central and local government levels between 2000 and 2022 in order to quantify and compare the evolution characteristics of China’s digital economy policy design.

This study’s findings reveal several key points: (1) The central government took the lead in issuing policies, with 2016 marking a pivotal year for central-level digital economy policies. Local government discussions on the digital economy emerged slightly later, with a swift response in 2018 by introducing a series of policies in quick succession. This indicates that in the field of the digital economy, the policy response of local governments also has a certain lag. At the same time, government attention has become more focused since 2018, with more digital economy policy agendas entering government decision-making, reflecting the intermittent and balanced nature of policy changes [37]. (2) Concerning policy goals, smart education and smart healthcare are the primary objectives for both central and local industrial digitalization efforts. However, there is a divergence in attention between central and local governments regarding other objectives such as infrastructure and capital markets. Furthermore, the goals of central-level digital economy policies are more variable, while local policies maintain a more stable focus on the digital products and services industry. The change in policy objectives reflects the differences in the entry of digital economy development issues into the decision-making agenda. The multi-source flow analysis framework emphasizes that policy agendas are mainly influenced by problem sources, policy sources, and political sources. The explanation for this result may be that the significant changes in the central government’s digital economy goals reflect the impact of political origins, while local governments are more influenced by problem origins [38,39]. (3) There is an uneven application of digital economy policy tools between central and local governments; supply oriented and environment-oriented policy tools are more widely used than demand-oriented ones. In terms of supply oriented tools, central and local policies differ in stability, focusing primarily on core technologies. Demand-oriented tools promote digital economy development through pilot demonstrations and platform construction, while environment-oriented tools prioritize information security, with local policies being more diverse. As mentioned in the theoretical foundation section, policy tools reflect decision-making laws. Some studies also indicate that the accelerated iteration of digital technology poses significant challenges to digital economic governance. Therefore, both central and local governments need to adapt to the changes in the digital age by constantly adjusting policy tools [47]. (4) The grounded analysis of policy texts indicates that central-level digital economy management involves multiple lines and diverse departments, with the vertical relationship between central and local data management institutions remaining ambiguous and not yet reaching a scientifically structured vertical data management system. Additionally, the degree of cross-departmental and cross-regional cooperation in central–local digital economy policies is low, exhibiting a clear trend towards decentralization. These research findings further validate the four research hypotheses proposed in the analytical framework section. This is consistent with the conclusion of the existing literature that there is a problem of subject collaboration in the top-level design of the digital economy, which brings about cooperation difficulties between horizontal regions and vertical cooperation difficulties between central and local governments [28,29]. (5) Empirical analysis based on a two-way fixed effects model shows that technological innovation, R&D investment, industrial structure, and other factors have a significant impact on changes in digital economy policies. This helps the government to scientifically grasp the direction of policy changes based on regional innovation capabilities and industrial characteristics.

Based on this, we can find that there is still a lot of room for optimization in the policy system that supports the sustainability of China’s digital economy, which also provides experience and a reference for the design of digital economy policies n other countries. Firstly, special attention should be paid to the impact of digital economy management entities on the sustainability of the digital economy. In the future, it is necessary to fully leverage the organizational guidance role of the National Data Administration and accelerate the clarification of the functional positioning of central and local digital economy management institutions. We need to accelerate the integration of functional departments in the digital economy, promote cross-departmental and cross-regional cooperation, and thus improve the scientific level of decision-making and regulatory capabilities in the digital economy [70]. Secondly, digital economy policy goals should be formulated based on the needs of sustainable development. In addition to emphasizing the digitalization of basic healthcare and education industries, it is also necessary to consider the unique characteristics and diverse needs of different industries to promote the comprehensive and full chain digital transformation of traditional industries [71]. Thirdly, achieving sustainability in the digital economy should avoid excessive reliance on a single policy tool. In the future, we need to establish a comprehensive policy tool utilization system with a balanced structure, strengthen the application of demand-oriented policy tools, and optimize the proportion structure of the three types of tools. Fourthly, we must fully recognize the driving role of factors such as technological innovation and industrial structure in the evolution of digital economy policies and scientifically formulate policies that meet the actual development needs based on the characteristics of the local region.

In addition, this article also makes certain contributions in terms of research methods and perspectives. This article differs from some purely qualitative analyses of policy documents by introducing a quantitative analysis method of policy texts, especially by designing a policy analysis dictionary specifically for the digital economy. Thanks to the Chinese government’s introduction of a large number of relevant policies, this dictionary helps extract the characteristics and laws of digital economy policies from a vast number of policy texts. It enhances the scientific and rigorous nature of research and provides some inspiration for policy research in other fields. At the same time, when constructing a three-dimensional analysis framework, this article also incorporates the relationship between the central government and local governments with Chinese characteristics, which enhances the dynamism of policy analysis and further enriches research on policy implementation and policy interaction. Of course, there are still some shortcomings in this study, such as the policy sample not being large enough and the policy topic discussion not being in-depth enough. The analysis of the driving factors for policy changes also needs to consider internal mechanisms. In the future, we can continue to expand the time period to increase the sample size or use machine learning methods to capture relevant policy texts in real time. At the same time, we will further focus on the implementation and evaluation of digital economy policies, especially tracking and evaluating individual digital economy pilot policies. And we will capture the driving factors that affect the evolution of digital economy policies in more detail at the municipal level, decompose the differences in different periods, and provide more solid micro empirical evidence for promoting the long-term stable growth of the digital economy and achieving sustainability.