Abstract: As a core indicator for measuring the level of economic development,GDP has become a globally recognized economic metric since it was established by Simon Smith Kuznets in the 1930s. However,as China's economic and social development enters a new stage,the limitations of the traditional GDP indicator have become increasingly apparent,making it difficult to meet the comprehensive assessment needs of development quality in the context of Chinese modernization. Constructing a new economic measurement that can address the shortcomings of GDP and align with the development orientation of Chinese modernization is not only an optimization and improvement of the existing accounting system but also a necessary requirement to provide scientific and quantitative support for advancing Chinese modernization. This paper proposes the concepts of Effective GDP and the adjustment factor, in which we apply the adjustment factor to convert GDP into Effective GDP. The Effective GDP and the adjustment factor reflect the goals of sustainable development, providing an innovative, scientific, and practical solution to address the pitfalls of traditional GDP measures. Our further analysis, based on the data from 248 countries and regions, shows that the adjustment factor performs much better than traditional measures in measuring the level of sustainable development. Specifically, the adjustment factor shows a significantly stronger correlation with well-being indicators such as the World Happiness Report (WHR), compared to Sustainable Development Goals Index (SDG Index). These results show that the Effective GDP better captures aspects of development quality beyond what is reflected in GDP alone. Unlike the United Nations' SDG framework, which encompasses hundreds of indicators, Effective GDP relies on an adjustment factor constructed from only seven core indicators. This streamlined approach explains the majority of variations in well-being, and level of sustainable development, which makes the metric easier to monitor, compare, and apply. According to World Bank data,China's per capita GDP in 2024 is 13,300,placing it 73th globally. However,our calculations show that China's adjustment factor is 1.10,placing it 35th globally. The change in ranking suggests that when accounting for the quality of development guided by Chinese modernization,China's actual development level is much higher than its nominal per capita GDP rank implies. Meanwhile,some resource-rich countries with high per capita GDP may have adjustment factors significantly below 1 due to deficiencies in productivity,equity,and other dimensions,resulting in lower rankings in adjustment factor compared to their nominal GDP rankings. The adjustment factor and its performance across sub-indicators thus provide a more precise framework for countries to assess their development status and identify areas for improvement.