The Impact of the Digital Economy on Urban–Rural Income Disparity in China

Abstract

The digital economy has become one of the most important driving forces for the revolution of global economics. It is reshaping production, finance, consumption, and public services. In the past 20 years, China’s rapid digitalization process – from broadband expansion, the utilization of 5G technology, e-commerce, and the development of digital finance – has offered several new opportunities for increasing income and expansion of the market. This article discusses the twin impact of the development of the digital economy on narrowing or expanding the income gap between city and rural areas. Rural e-commerce, mobile finance, and digital public services both significantly increase the family income and offer new opportunities for start-up businesses and human capital. However, some people still have several problems, such as a lack of Internet connection, platforms most focused on city areas, the technology revolution toward specific skills, and the gap in infrastructure between areas. This article also uses several real pieces of evidence that include several provinces in China. The research conclusion has an important insight for developing countries like China and others on the way of digitalization.