Although the problems created by exceeding Earth’s carrying capacity are real, a too-small population also creates problems. The convergence of a nation’s population into small areas (i.e., cities) via processes such as urbanization can accelerate the evolution of a more advanced economy by promoting new divisions of labor and the evolution of new industries. The degree to which population density contributes to this evolution remains unclear. To provide insights into whether an optimal “threshold” population exists, we quantified the relationships between population density and economic development using threshold regression model based on the panel data for 295 Chinese cities from 2007 to 2019. We found that when the population density of the whole city (urban and rural areas combined) exceeded 866 km⁻², the impact of industrial upgrading on the economy decreased; however, when the population density exceeded 15,131 km⁻² in the urban part of the cities, the impact of industrial upgrading increased. Moreover, it appears that different regions in China may have different population density thresholds. Our results provide important insights into urban economic evolution, while also supporting the development of more effective population policies.

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