Oil extraction, private investment, and sustainable economic development in China

Abstract

This study uses time series analysis of ARDL from 1985 to 2022 to evaluate the impacts of oil extraction volume and Private Participation in Infrastructure (PPI) on China's sustainable economic development. It finds that a 1% increase in oil extraction volume leads to a 0.54% reduction in sustainability in the short term and a 0.41% reduction in the long term. The short-term impact is more pronounced due to immediate environmental costs, though it lessens over time with improved technology and regulations. PPI investments show an insignificant effect on sustainability, likely due to their indirect impact and varying quality. Increased digital device production positively influences sustainability in both the short and long term, while income inequality (GINI index) negatively affects it. In contrast, Small and Medium-sized Enterprises (SMEs) boost sustainability through local economic growth and innovation. Policy recommendations include stricter environmental regulations for oil extraction, promoting digital finance for private investment, tax incentives for green projects, and enhanced ESG reporting.