Research On The Impact Of Digital Economy On The Upgrading Of Manufacturing Structure

China is now in the middle of the "14th Five-Year Plan" development phase,the pace of economic growth is no longer the main objective,the quality of development has become a common factor,and the manufacturing industry that supports China’s rapid development is also systematically "improving its face".The much-vaunted "Made in China" has become a thing of the past,and the development of manufacturing is plagued by a number of problems,the first of which is obvious shortcomings in key technology areas,the second the gradual erosion of comparative advantage and the third increasing international competition.The Second Decade Report also stresses that "we need to foster the development of high-level,smart and environmentally sustainable manufacturing industries".The report also stresses that "we need to promote the development of high-quality,intelligent and environmentally sound manufacturing industries.Faced with "internal and external attacks",China’s manufacturing industry urgently needs to modernise its industrial structure and become "digitally intelligent" in order to embark on a new path of sustainable and robust development.The digital economy is based on digital information elements,strong innovation capability,revolutionary information transmission and communication technologies and a well-connected information network,which will completely overturn the traditional industrial model and transform the traditional structure of scientific and technological innovation forms,elements and resources and the way they are distributed,and achieve a precise match with demand,marking a new way forward with the dual objectives of structural upgrading and favourable development of manufacturing industry.Therefore,it is important to study the impact of the digital economy as a transmission mechanism on the structural upgrading of China’s manufacturing industry and make relevant targeted recommendations aimed at the structural upgrading of manufacturing industry to ensure the transformation and upgrading of manufacturing industry.At the beginning of the paper,the relevant theories of digital economy as well as the literature related to the structural upgrading of manufacturing industry and the literature on digital economy and structural upgrading of manufacturing industry in general are integrated and summarized to explain the concept of digital economy,the significance of structural upgrading of manufacturing industry,the relevant factors affecting the structural upgrading of manufacturing industry,and the measurement of digital economy,etc.The theoretical analysis will conclude how the digital economy affects the structural upgrading of manufacturing industry,which consists of two parts: direct and indirect effects.In order to test the direct impact,an empirical test is carried out to test the direct impact by running a comparative regression between the two indicators,and then the heterogeneity of the impact in terms of both indicator level and geographical area is tested.In the last part,once the results of the empirical part have been obtained,a response analysis will be carried out in order to map the state of development of the digital economy with the existing problems of the production structure and to provide targeted recommendations.The study finds that China’s digital economy has generally grown over the nine-year period(2012-2020),with uneven development across regions,with overall digital economy indicators higher in the east than in the central and western regions;and how the digital economy directly affects the structural modernisation of manufacturing industries.It should be clarified that the impact of the digital economy on the structural upgrading of the manufacturing industry varies depending on the geographical location,dividing China’s geographic region into two-the East and the Mid-West.The scope of the digital economy study is divided into three different levels,namely the level of digital infrastructure construction,the level of digital industrialization development,and the level of digital R&D investment,all of which can have a positive and significant impact on the modernization of the structure of manufacturing industry,with the impact of digital R&D investment being the largest and the impact of digital infrastructure on the modernization of the structure of manufacturing industry being smaller than the level of digital R&D investment.and digital industrialisation has the weakest impact on the modernisation of the structure of manufacturing industry.A further dimension,namely the indirect impact of the digital economy on the modernisation of the structure of manufacturing industry,is further explored.After exploring possible transmission mechanisms from a theoretical perspective,we then carry out empirical studies and find that technological innovation is indeed an effective transmission mechanism,i.e.the digital economy can contribute to the structural modernisation of manufacturing industry by raising the level of technological innovation,and can also contribute to the structural modernisation of manufacturing industry by reducing the level of capital mismatch.Raising the level of technological innovation and increasing the level of capital allocation,in combination,can improve the efficiency of production and the added value of products and contribute to the modernisation of the structure of manufacturing industry.The main innovations include: firstly,broadening the scope of research.Unlike most previous studies that focus on a specific province or a few urban clusters,this work extends the scope to the whole country and examines the impact of the digital economy on the modernisation of the production structure from a broad macroeconomic perspective.Secondly,the perspective of the study is broader.In the case of a comprehensive index of the digital economy,the study is broken down by region and by level of indicators to make the findings more targeted.Thirdly,the survey methodology is innovative.This paper uses fixed effects and surrogate models to empirically investigate the role of technological innovation and the distribution of factors on the impact of the digital economy on structural upgrading of manufacturing,and proposes an indirect pathway through which the digital economy can affect structural upgrading of manufacturing.