Productivity determines the production relationship, and its specific mechanism of action lies in the fact that significant progress in productivity adjusts the status of various elements in the production process and their relationships in the distribution mode by altering their degrees of participation in the production process. Especially after the First Industrial Revolution, the advancement of productivity gave rise to the most important proletarians and capitalists in the capitalist production relationship, gradually deepening the exploitative relationship, and ultimately, the exploiters will be dispossessed. Similarly, the progress of productivity will inevitably change the status of the elements involved in the production process. These elements include not only spatially attached elements such as land and resources but also information elements whose influence is increasing currently, and even technological elements themselves. The progress of productivity alters the above-mentioned elements in the production process, thereby changing the interrelationships among the owners of various production factors and the status and interrelationships of the owners of production factors in product distribution. In economic activities, the mechanism by which productivity determines the production relationship is realized through the economic growth process and via the labor market. The progress of productivity does not emerge out of thin air but is stimulated by the continuously increasing social demand. In the economic growth process, when the expectation of demand structure upgrading drives technological progress, technological progress promotes the adjustment of the production relationship, the adjustment of the production relationship improves the distribution mode, and the improvement of the distribution mode promotes the expectation of demand structure upgrading, forming a mechanism of cyclical development and spiral upward progress. At the same time, technological progress directly deepens the labor exploitation relationship through the labor market. Due to the early formation of labor supply expectations, there are gaps between the utility and price expectations of labor demand under industrial technological progress and the labor supply expectations, which continuously deepens the exploitative relationship between capital and labor. The general mechanism by which productivity determines the production relationship has undergone new changes in the current new industrial revolution era. The new industrial revolution differs from previous ones. The utilization efficiency of various production factors in the production process is higher, while their total quantity decreases and their status declines. Meanwhile, the labor factor has shown a narrowing trend both in terms of total employment volume and employment structure. This means that the way in which productivity adjusts the production relationship can no longer be mainly resolved spontaneously from the bottom up with the help of market forces as in previous industrial revolutions. Instead, more conscious adjustments need to be made from the top down through the system. With the superiority of the socialist system, China should make relevant institutional arrangements as early as possible.