This study investigates the dynamic relationship between economic currents and land use changes on Chongming Island, China, during the period from 2000 to 2020, coinciding with its transformation into an Ecological Island Carbon Neutral Demonstration (ECND) Zone. Employing remote sensing and Geographic Information Systems (GIS), our research not only identifies significant spatiotemporal changes, such as an 8.72% increase in constructed land and an 11.79% decline in water areas, but also delves into the nuanced shifts in forested and grassland areas. These findings prompt a critical exploration of the intricate balance between economic growth and ecological preservation within the context of urbanization. Our research resonates with interdisciplinary studies and policy objectives, emphasizing the imperative of sustainable urban development that respects the island's ecological equilibrium. Amidst the challenges posed by rapid urbanization, the oscillations in forested and grassland areas underscore the vital importance of strategic land use planning and habitat restoration. This quantitative analysis not only contributes to Chongming Island's evolution as an ECND Zone but also provides a valuable model for estuarine islands worldwide grappling with similar issues. As Chongming Island continues its journey towards ecological sustainability, our study stands as a quantitative guide for informed decision-making in sustainable land management and preservation, shedding light on the intricate interplay between economic currents and land use changes in this unique context.