China's Digital Economy, Green Goals, and Carbon Markets: A Dynamic Trio

Research Overview

In recent years, China has been making significant strides to integrate its digital economy with environmental protection and carbon neutrality goals. To understand the interplay between these areas, researchers analyzed daily data from early 2019 to mid-2025 using a specialized method to decompose the data into long-term, short-term, and sudden changes.

Key Findings

• Strong Interconnections: The study revealed that these three areas are closely linked, particularly in the long run.
• Driving Force: Carbon neutrality appears to be the primary driver, with environmental protection benefiting from it, while the digital economy acts as a bridge.
• Dynamic Relationships: The connections between these areas evolve over time. For instance, the introduction of new technologies like ChatGPT and AI tools strengthened the short-term and sudden effects.

Investment Insights

• Short-Term Strategies: The digital economy is a strong choice for managing short-term risks, offering lower costs and higher efficiency.
• Long-Term Strategies: Carbon neutrality is better suited for long-term investment strategies.
• Market Conditions:
• During favorable conditions: Focus on long-term plans.
• During downturns: Prioritize managing sudden risks.

Conclusion

These findings provide valuable insights for investors looking to navigate risks and make informed decisions in these interconnected areas. The digital economy, environmental protection, and carbon neutrality are all critical to China's future development.