Digital Economy and Chinese-Style Modernization: Unveiling Nonlinear Threshold Effects and Inclusive Policy Frameworks for Global Sustainable Development
Abstract
1. Introduction
2. Literature Review
3. Theoretical Analysis and Research Hypotheses
3.1. The Digital Economy and Chinese-Style Modernization
3.2. The Digital Economy, Rationalization of the Industrial Structure and Chinese-Style Modernization
3.3. The Digital Economy, Trade Openness, and Chinese-Style Modernization
4. Research Design
4.1. Model Building
4.2. Variable Selection and Metric
4.3. Data Sources
5. Empirical Analysis
5.1. Analysis of the Importance of Digital Economy to Chinese-Style Modernization
5.2. Benchmark Regression Analysis
5.3. Mechanism Analysis
5.4. Robustness Estimation
5.5. Analysis of Heterogeneity
5.6. Further Analysis: Nonlinear Effect
5.7. Methodological Optimization and Significance Verification for China’s Context
6. Conclusions and Policy Recommendations
6.1. Conclusions
6.2. Policy Proposal
- (1)
- Prioritize investments in energy-efficient digital infrastructure such as 5G networks, smart grids, and AI-driven data centers that incorporate sustainability standards, including mandatory adoption of renewable energy sources and circular economy practices for e-waste management in new data centers. This strategy addresses regional disparities by channeling subsidies to green digital projects in western provinces while encouraging eastern regions to scale advanced technologies, thereby fostering balanced development. Such investments not only accelerate economic modernization through improved connectivity and innovation but also contribute to the carbon neutrality goals aligned with the Sustainable Development Goals (SDGs) 7 (affordable and clean energy), 9 (industry, innovation, and infrastructure), and 13 (climate action).
- (2)
- Sustainability-Oriented Regulatory Innovation Adopt flexible regulatory frameworks that balance economic efficiency with environmental stewardship by implementing three key strategies. First, green industrial policies should incentivize digital transformation in high-emission sectors like manufacturing through market-based tools such as carbon pricing mechanisms and mandatory green certifications. Second, cross-sectoral data governance systems can optimize resource allocation via smart urban applications, for example, integrating real-time waste management data to enhance recycling rates and reduce landfill usage (SDG 11). Finally, trade agreements with sustainability clauses should be designed to facilitate international green technology transfers while restricting imports of carbon-intensive goods, thereby aligning globalization with ecological objectives. These measures collectively promote sustainable modernization by embedding environmental accountability into market-driven processes.
- (3)
- Closing digital gaps demands tailored strategies. Rural areas should expand e-commerce and telemedicine to improve market access and healthcare, advancing SDGs 1, 3, and 10. Joint government–education–private sector initiatives must prioritize digital skills training to address unemployment risks from automation. Central provinces can pilot smart city projects via public–private partnerships to demonstrate governance innovation. Internationally, participation in frameworks like DEPA ensures alignment with global sustainability goals. This involves sharing climate data, fostering green tech R&D cooperation, and transferring energy-efficient digital solutions to developing nations (SDG 17). Such collaborations accelerate progress while ensuring the equitable distribution of digital benefits.
7. Research Limitations and Future Research Directions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Level 1 Indicators | Secondary Indicators | Attribute |
---|---|---|
Economic modernization | Per capita GDP | + |
Per capita disposable income of all residents | + | |
consumer price index | − | |
Technology market turnover as a percentage of GDP | + | |
Total import and export volume of foreign-invested enterprises | + | |
The number of valid invention patents of industrial enterprises above designated size | + | |
Modern social processes | The registered urban unemployment rate | − |
The average number of students in institutions of higher learning per 100,000 population | + | |
Number of health technicians per 10,000 people | + | |
Number of social organization units | + | |
The public library floor area for every 10,000 people | + | |
The proportion of housing security expenditure in government expenditure | + | |
Urban and rural areas and regional modernization | Urbanization rate | + |
Urban gas penetration rate | + | |
The Thiel index for urban and rural residents’ income | + | |
Per capita disposable income of urban residents | + | |
Per capita disposable income of rural residents | + | |
Per capita urban road area | + | |
Modernization of ecological civilization | Nitrogen oxide emissions | − |
Green coverage rate of the built-up area | + | |
land area covered with trees | + | |
Sulfur dioxide emissions | − | |
Per capita water resources | + | |
Ammonia nitrogen emissions | − | |
Modernization of governance capacity | Area of soil erosion control | + |
Daily urban sewage treatment capacity | + | |
The total number of traffic accidents occurred | − | |
The proportion of public services expenditure in government expenditure | + | |
The proportion of public security expenditure in government expenditure | + | |
The harmless treatment rate of household garbage | + |
Level 1 Indicators | Secondary Indicators | Attribute |
---|---|---|
Digital infrastructure | Number of Internet broadband access ports | + |
Number of Internet broadband access users | + | |
Domain name number | + | |
Number of web pages | + | |
Digital industrialization | Total telecom business | + |
The proportion of the employed persons in information transmission, software and information technology services in urban units | + | |
penetration | + | |
Industrial digitization | Digital financial inclusion | + |
Express volume | + | |
Value-added value of the tertiary industry | + | |
Digital economy development environment | R & D funds for industrial enterprises above designated size | + |
Local government expenditure on science and technology | + |
Variable | Observed Value | Average Value | Standard Deviation | Least Value | Crest Value |
---|---|---|---|---|---|
Chinese-style modernization () | 341 | 0 | 1.314 | −2.717 | 5.8 |
Digital economy (dige) | 341 | 0 | 1.905 | −2.4 | 8.411 |
Industrial structure (indrea) | 341 | 11.937 | 14.818 | 1.312 | 122.56 |
Trade open (traope) | 341 | 0 | 1.000 | −0.597 | 5.941 |
Market index (market) | 341 | 7.829 | 2.217 | −0.161 | 12.39 |
Technological progress level (lnpatent) | 341 | 10.672 | 1.715 | 4.5 | 14.277 |
Level of economic development (lngdp) | 341 | 9.736 | 1.005 | 6.416 | 11.734 |
Minimum wage level (lnincome) | 341 | 7.118 | 0.289 | 6.215 | 7.859 |
Investment in the fixed assets (lncap) | 341 | 5.827 | 1.087 | 2.252 | 7.778 |
Educational level (educa) | 341 | 9.231 | 1.082 | 4.666 | 12.701 |
Living standard of residents (engel) | 341 | 31.237 | 5.057 | 19.308 | 49.9 |
Population growth rate (popu) | 341 | 4.625 | 3.202 | −5.11 | 11.47 |
(1) | (2) | (3) | (4) | (5) | (6) | |
---|---|---|---|---|---|---|
Chimo | Chimo | Chimo | Chimo | Chimo | Chimo | |
dige | 0.095 ** | 0.089 ** | ||||
(0.04) | (0.04) | |||||
L.dige | 0.105 ** | |||||
(0.04) | ||||||
L2.dige | 0.126 ** | |||||
(0.05) | ||||||
L3.dige | 0.186 ** | |||||
(0.08) | ||||||
L4.dige | 0.213 ** | |||||
(0.08) | ||||||
constant term | −1.146 *** | 0.834 | 2.144 | 3.721 | 5.710 | 4.884 |
(0.07) | (2.82) | (3.32) | (3.99) | (5.07) | (6.01) | |
controlled variable | NO | YES | YES | YES | YES | YES |
Individual effect | YES | YES | YES | YES | YES | YES |
time effect | YES | YES | YES | YES | YES | YES |
observed value | 341 | 341 | 310 | 279 | 248 | 217 |
R2 | 0.951 | 0.953 | 0.944 | 0.938 | 0.929 | 0.918 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Indrea | Chimo | Traope | Chimo | |
dige | 5.121 * | 0.299 ** | ||
(2.90) | (0.11) | |||
indrea | 0.006 ** | |||
(0.00) | ||||
traope | 0.234 ** | |||
(0.09) | ||||
constant term | 141.191 | −0.340 | 1.786 | 0.319 |
(92.17) | (2.55) | (1.57) | (2.66) | |
controlled variable | YES | YES | YES | YES |
Individual effect | YES | YES | YES | YES |
time effect | YES | YES | YES | YES |
observed value | 341 | 341 | 341 | 341 |
R2 | 0.348 | 0.953 | 0.579 | 0.954 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Chimo | Chimo | Chimo | Chimo | |
dige | 0.116 *** | 0.125 ** | 0.066 * | 0.082 ** |
(0.024) | (0.057) | (0.035) | (0.032) | |
constant term | 4.467 | 1.026 | 1.194 | 0.865 |
(3.529) | (3.128) | (3.182) | (2.802) | |
controlled variable | YES | YES | YES | YES |
Individual effect | YES | YES | YES | YES |
time effect | YES | YES | YES | YES |
The Kleibergen—Paap rk LM statistic | 36.847 | 48.412 | ||
The Cragg—Donald Wald F statistics | 2357.269 | 73.930 | ||
observed value | 310 | 330 | 341 | 341 |
R2 | 0.936 | 0.945 | 0.883 | 0.953 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Chimo | Chimo | Chimo | Chimo | |
dige | 0.061 * | 0.099 ** | 0.082 ** | 0.071 * |
(0.035) | (0.048) | (0.034) | (0.038) | |
L.Chimo | 0.776 *** | |||
(0.096) | ||||
constant term | −3.073 | −0.561 | 2.089 | −4.137 |
(2.397) | (2.600) | (3.007) | (2.578) | |
controlled variable | YES | YES | YES | YES |
Individual effect | YES | YES | YES | YES |
time effect | YES | YES | YES | YES |
observed value | 297 | 310 | 341 | 279 |
R2 | 0.975 | 0.960 | 0.948 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
Infrastructure | Digital Industrialization | Industrial Digitization | Development Environment | |
infra | 0.070 | |||
(0.069) | ||||
digind | 0.085 | |||
(0.053) | ||||
inddig | 0.138 *** | |||
(0.033) | ||||
envdig | 0.088 *** | |||
(0.026) | ||||
constant term | 0.714 | 0.574 | 0.557 | 0.896 |
(2.805) | (2.715) | (2.744) | (2.717) | |
controlled variable | YES | YES | YES | YES |
Individual effect | YES | YES | YES | YES |
time effect | YES | YES | YES | YES |
observed value | 341 | 341 | 341 | 341 |
R2 | 0.951 | 0.951 | 0.953 | 0.952 |
(1) | (2) | (3) | (4) | (5) | |
---|---|---|---|---|---|
Economy | Social Process | Urban and Rural Areas | Ecological Civilization | Governance Capacity | |
dige | 0.372 *** | −0.123 * | 0.012 | −0.011 | 0.023 |
(0.042) | (0.064) | (0.032) | (0.101) | (0.043) | |
constant term | 0.065 | −8.017 * | −13.102 *** | 0.885 | 9.608 ** |
(3.189) | (4.123) | (2.597) | (4.783) | (4.351) | |
controlled variable | YES | YES | YES | YES | YES |
Individual effect | YES | YES | YES | YES | YES |
time effect | YES | YES | YES | YES | YES |
observed value | 341 | 341 | 341 | 341 | 341 |
R2 | 0.935 | 0.681 | 0.970 | 0.330 | 0.266 |
Variable | F Price | P Price | Significance Level | Threshold Value | Confidence Interval | ||
---|---|---|---|---|---|---|---|
10% | 5% | 1% | |||||
dige | 72.92 | 0.002 | 22.543 | 26.946 | 29.408 | 2.218 | [2.143,2.310] |
market | 187.05 | 0.000 | 25.801 | 31.925 | 41.407 | 9.212 | [9.194,9.233] |
inpantet | 155.49 | 0.000 | 23.974 | 31.395 | 39.717 | 12.224 | [12.221,12.239] |
(1) | (2) | (3) | |
---|---|---|---|
Chimo | Chimo | Chimo | |
The threshold variable | dige | market | lnpatent |
−0.097 ** | −0.151 *** | −0.139 *** | |
(0.036) | (0.035) | (0.048) | |
0.044 * | 0.053 ** | 0.041 * | |
(0.024) | (0.025) | (0.022) | |
constant term | −1.344 | −1.754 | −1.844 |
(2.610) | (2.195) | (2.721) | |
controlled variable | YES | YES | YES |
Individual effect | YES | YES | YES |
time effect | YES | YES | YES |
observed value | 341 | 341 | 341 |
R2 | 0.961 | 0.970 | 0.966 |
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Qi, T.; Liu, W.; Chang, X. Digital Economy and Chinese-Style Modernization: Unveiling Nonlinear Threshold Effects and Inclusive Policy Frameworks for Global Sustainable Development. Economies 2025, 13, 215. https://doi.org/10.3390/economies13080215
Qi T, Liu W, Chang X. Digital Economy and Chinese-Style Modernization: Unveiling Nonlinear Threshold Effects and Inclusive Policy Frameworks for Global Sustainable Development. Economies. 2025; 13(8):215. https://doi.org/10.3390/economies13080215
Chicago/Turabian StyleQi, Tao, Wenhui Liu, and Xiao Chang. 2025. "Digital Economy and Chinese-Style Modernization: Unveiling Nonlinear Threshold Effects and Inclusive Policy Frameworks for Global Sustainable Development" Economies 13, no. 8: 215. https://doi.org/10.3390/economies13080215
APA StyleQi, T., Liu, W., & Chang, X. (2025). Digital Economy and Chinese-Style Modernization: Unveiling Nonlinear Threshold Effects and Inclusive Policy Frameworks for Global Sustainable Development. Economies, 13(8), 215. https://doi.org/10.3390/economies13080215