The Chinese manufacturing industry is currently in a transition process due to the push for sustainability and competition improvement. This research illustrates the mediating role of technology adoption in sustainable innovation and digital transformation for Chinese manufacturing enterprises’ business performance. To realize the objectives of the study, the researchers distributed and retrieved a structured questionnaire from 51 manufacturing firms situated in China. The statistical analysis indicated that sustainable innovation had a statically insignificant positive effect on business performance yet digitalization had a strong statistically positive effect. Simon also identified another significant moderated variable in the study that acted as an intermediary variable for all the hypothesized relationships; manufacturing enterprises’ technology adoption and assimilation capacity influenced the relationship existing between sustainable innovation, digital transformation, and business performance. Based on these results, as a conclusion it can be stated that Chinese manufacturing companies should consider digitalization as the key strategic topic that aims to facilitate the enhancement of financial and market performance. However, technology adoption as a mediator calls for these firms to also acquire the right technological competence to support sustainable innovation strategies. The findings of this study would help policymakers and industries to draw policies and strategies that affect the improvement of the competitiveness and sustainability of the Chinese manufacturing sector.