Digital Economy and Sustainable Development in China: From the Perspective of High-Quality Development of Manufacturing

Abstract

This study investigates the role of the digital economy (DE) in advancing the high-quality development of manufacturing in China, with a particular focus on the moderating effects of manufacturing agglomeration and digital literacy. Using provincial panel data from 2013 to 2023, we find that the digital economy significantly enhances manufacturing development across three key dimensions: green transformation, innovation, and high-end industrial upgrading. Manufacturing agglomeration strengthens this effect, especially in the Eastern and Western regions, by facilitating digital spillovers and leveraging digital infrastructure. However, in the Central region, the impact of agglomeration is weaker, hindered by fragmented industrial clusters and underdeveloped digital infrastructure. The study also highlights significant regional differences in the moderating effect of digital literacy. In the Eastern region, digital literacy negatively moderates the relationship between DE and manufacturing development due to skill mismatches, while in the Western region, localized concentrations of digital skills have a positive but geographically constrained impact. Temporal analysis reveals a shift in the moderating role of digital literacy, with its negative effect becoming more pronounced after 2018, suggesting a growing need for targeted skill development policies. These findings underscore the importance of regionally tailored strategies to promote digital manufacturing integration, with a focus on sustainable development through digital transformation and green manufacturing practices.