Abstract:The digital economy significantly influences the competitive landscape of major powers and manufacturing sectors. Utilizinga theoretical model, this study devises an internationally comparable digital economy development index through reference to the G20 toolkit. The study then explores the effects and mechanisms of the digital economy in the destination country on the quality of Chinese export goods. Moreover, it delves into the implications of the dual digital gap. Findings reveal a substantial enhancement in the quality of Chinese export products due to the advancement of the digital economy in the destination. This enhancement is primarily realized through the interplay of the cost reduction, technology spillover, and differentiation competition mechanisms, with the risk mitigation mechanism demonstrating limited significance. Notably, the cost reduction and technology spillover mechanisms predominantly manifest in destinations characterized by robust industrial competitiveness and the absence of regional trade agreements with China.Conversely, the differentiation competition mechanism primarily operates in alternative destinations. The digital disparity between China and the destination, as well as that between China and other export-competitive nations, have given rise to contrasting outcomes,including“reverse selection effects”and“positive promotion effects”. Nevertheless, in the long term, transitioning from a“Digital Gap”to a state of“Digital Inclusiveness”proves more advantageous for enhancing the quality of Chinese export products.