<p>Global Value Chain digitization(GVC digitization) offers a strategic opportunity for the high-end integration of China’s manufacturing into Global Value Chains, and digitally-driven upgrading is emerging as a new trend in Global Value Chain development. Based on the Asian Development Bank’s World Input-Output Database from 2007 to 2022, this article analyzes the implications and method of GVC digitization on the upgrading of China’s manufacturing value chain. GVC digitization has a facilitating effect on upgrading China’s manufacturing value chain. The results of heterogeneity analysis show that both GVC digitization from domestic factor sources and from foreign factor sources have the most significant impact on the value chain upgrading of technology-intensive manufacturing, especially medium- and high-technology manufacturing. Meanwhile, GVC digitization of domestic factor sources has an increasingly significant facilitating impact for inland regions, while GVC digitization of foreign factor sources has a more significant inhibiting effect on coastal regions. According to mechanism research, penetration empowerment, value-added creation, and cost savings are significant channels through which GVC digitization influences value chain upgrading in China’s manufacturing. The penetration enabling and value creation effects are among the most significant, while the cost-saving effect is the least. This article effectively indicates the importance of GVC digitization for the upgrading of China’s manufacturing value chain, and provides an obvious reference foundation and policy inspiration for China’s high-quality development.</p>