Digital Economy and Chinese-Style Modernization: Unveiling Nonlinear Threshold Effects and Inclusive Policy Frameworks for Global Sustainable Development

Tao Qi, Wenhui Liu and Xiao Chang ()
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Tao Qi: School of Statistics and Applied Mathematics, Anhui University of Finance and Economics, Bengbu 233010, China
Wenhui Liu: School of Statistics and Applied Mathematics, Anhui University of Finance and Economics, Bengbu 233010, China
Xiao Chang: School of Statistics and Applied Mathematics, Anhui University of Finance and Economics, Bengbu 233010, China

Economies, 2025, vol. 13, issue 8, 1-20

Abstract: This study focuses on the impact of China’s digital economy on sustainable modernization from 2011 to 2021, using provincial panel data for empirical analysis. By applying threshold and mediation models, we find that the digital economy promotes modernization through industrial upgrading (with a mediating effect of 38%) and trade openness (coefficient = 0.234). The research reveals “U-shaped” nonlinear threshold effects at specific levels of digital development (2.218), market efficiency (9.212), and technological progress (12.224). Eastern provinces benefit significantly (coefficient ranging from 0.12 to 0.15 ***), while western regions initially experience some inhibition (coefficient = −0.08 *). Industrial digitalization (coefficient = 0.13 ***) and innovation ecosystems (coefficient = 0.09 ***) play crucial roles in driving eco-efficiency and equity, in line with Sustainable Development Goals 9 and 13. Meanwhile, the impacts of infrastructure (coefficient = 0.07) and industrialization (coefficient = 0.085) are delayed. Economic modernization improves (coefficient = 0.37 ***), yet social modernization declines (coefficient = −0.12 *). This study not only enriches economic theory but also extends the environmental Kuznets curve to the digital economy domain. We propose tiered policy recommendations, including the construction of green digital infrastructure, carbon pricing, and rural digital transformation, which are applicable to China and offer valuable references for emerging economies aiming to achieve inclusive low-carbon growth in the digital era. Future research could further explore the differentiated mechanisms of various digital technologies in the modernization process across different regions and how to optimize policy combinations to better balance digital innovation with sustainable development goals.

Keywords: Chinese-style modernization; digital economy; nonlinear effects; industrial restructuring; trade liberalization; sustainable development (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2025
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