Unlocking Economic Unity: The Digital Economy’s Impact on Market Segmentation in China

In an era marked by economic globalization, rising protectionism, and the COVID-19 pandemic’s ongoing challenges, market segmentation plays a critical role in shaping economic dynamics. In navigating a rapidly changing global landscape, China has formulated strategies to prioritize domestic circulation and harmonize domestic and foreign circulations. Market segmentation, known for its detrimental effects on economic development and income inequality, poses significant challenges to consumers and producers. This paper explores the potential of the digital economy, driven by technologies like the Internet, big data, and 5G, to dismantle market segmentation and promote a unified domestic market. Combining theoretical frameworks with empirical analysis, this research investigates the complex relationship between the digital economy and market segmentation. It reveals that the digital economy holds transformative potential, especially in coastal regions, where modern digital infrastructure is prevalent. The study emphasizes the importance of customized policies to address regional disparities and offers strategic policy recommendations. Theoretical implications include expanding our understanding of the digital economy’s role in mitigating market segmentation and encouraging scholars to reassess conventional economic paradigms in emerging technology environments. Policy recommendations call for coordinated efforts to support digital infrastructure, develop a regional digital economy, and improve legal frameworks to balance innovation and market regulation. This research contributes valuable insights for policymakers navigating the intersection of technology, market dynamics, and economic integration in the digital age.