With the progression of industrialization and urbanization, terrestrial ecosystems have experienced varying degrees of degradation in their carbon sequestration capabilities, leading to functional loss in some regions. Consequently, the issue of reducing emissions and enhancing carbon sinks, especially in addressing the carbon imbalance brought on by urban and industrial developments, has become a focal point for international organizations and the academic community. Existing studies have separately investigated the effects of changes in single land use types, such as built-up land, forest land, and cropland, on carbon emissions or carbon sequestration. However, few studies have discussed carbon emissions and carbon sequestration within the same framework. This study, based on remote sensing data from 2000 to 2020, utilizes spatial autocorrelation analysis and spatial Durbin model to reveal the long-term trends in land use intensity and carbon balance in China. It was found that the carbon balance index decreased annually by 3.42%, from 0.2406 to 0.0760 during that period. In particular, the eastern and central regions of China exhibited increasingly evident carbon deficits, with most areas along the southeastern coast transitioning from a carbon surplus to a carbon deficit. Over two decades, China’s land use intensity and carbon balance developed a stronger negative spatial dependence. The spatial match and mismatch between land use intensity and carbon deficit are the primary clustering types for their spatial correlation. Each unit increase in land use intensity decreased the local city carbon balance by 0.755 but raised the carbon balance in adjacent areas by 2.740. This indicates that land use intensity impacts the local carbon balance negatively but benefits neighboring regions. There is also evident spatial inequality in different economic zones, with the strongest impact in the Northeast, followed by the Western, Eastern, and Central regions. The resolution of these issues reveals the spatial inequalities and remote driving effects of land use transformation on carbon balance across different scales, from the “entire region” to “economic divisions”. The results of this study provide theoretical and empirical evidence for emissions reduction and carbon sequestration in cities at different levels of land use intensity.