Abstract: Digital economy has become a key force to promote the economic development of all countries in the world. Exploring a digital economy development model in line with its national conditions under the background of the new era has great strategic significance for China. The difficulties and challenges in the development of China's digital economy have been analyzed to find that China's digital economy has encountered such problems as insufficient penetration of manufacturing industry, data islands, and information security. In addition, China is faced with the dual challenges of how to break through the digital economy in the global economy and the new relationship between digital economy and technological innovation. Four development paths of strategy, industry, technology and system, and relevant policy suggestions based on the development process of China's digital economy are put forward to explore the path of digital economy reform and innovation with Chinese characteristics.

Key words: digital economy, developmental model, reform innovation, digital transformation