The Impact Of The Digital Economy And New Infrastructure On China’s Economic Development

Abstract

With the rapid growth of digital technology and the advent of the epidemic and post-epidemic era, digital economy has become a vital force driving China’s monetary growth and transformation and modernizing. The digital economy and new infrastructure are two important directions in current China’s economic development. Using the newly implemented infrastructure policies released by municipality governments in China from 2018 to 2022 as a data source, the concept of new progress, driven by novel technologies, and built on digitized networks of information, is used to provide a source of power for further economic development. This paper investigates the positive and negative effects of the mathematical economy on economic growth using the Cobb-Douglas production function, Keynes-Hicks social welfare function, and Differential pricing model. One way that the digital economy might advance is by lowering transaction costs, increasing economic growth rates and total factor productivity, creating new employment opportunities, raising individual income levels, improving social services and public administration, raising social welfare levels, and further promoting economic development. On the other hand, new infrastructure includes digital infrastructure, smart manufacturing, new energy, and transportation infrastructure. The construction of these infrastructures can promote industrial upgrading and the adjustment and optimization of industrial structures. The transformation of traditional service and manufacturing industries into digitized online industries will ultimately lead to a more transparent and efficient overall economy. Even if the new infrastructure and digital economy can cause problems such as unfair competition and privacy breaches, the combination of them can lead to a win-win situation for economic development in China.