Smart-City Policy in China: Opportunities for Innovation and Challenges to Sustainable Development

Urban development relies on the promotion of innovation, while sustainable development is an inevitable requirement for green urban development. As the primary carrier of innovation and sustainable development, cities have seen the construction of smart cities become a hotspot topic of public concern against the backdrop of rapid advancements in information technology. Based on the Chinese smart-city pilot policies, this paper selects data from 278 prefecture-level cities between 2007 and 2020, employing difference-in-difference (DID), epsilon-based measures and global Malmquist–Luenberger index (EBM-GLM), and the Spatial Durbin Model (SDM) to analyze the direct impact, spatial effects, and regional differences of smart-city construction on urban innovation capacity and sustainable development. The research results indicate the following: (1) the implementation of smart-city policies significantly enhances the urban innovation capacity (UCI), but its impact on green total-factor productivity (GTFP) is unstable and even insignificant; (2) the UCI and GTFP of smart cities have spillover effects, and the implementation of policies may inhibit the improvement of UCI and GTFP in neighboring cities; (3) the impact of smart-city construction varies across different regions, with a more significant promotion effect on the innovation capacity of economically developed cities.