This research explores the interplay between innovation, economic systems, governance structures, and law, and how they interact with one another in the context of China and Ethiopia’s investments in the Digital Silk Road. The way cutting-edge methods related to governance and economic systems might help lower the risks involved in major infrastructure projects, like the Digital Silk Road, particularly in light of law and 5G developments, is investigated. China–Africa connections are to be strengthened, sustainable development is to be encouraged, and healthy economic progress is the goal of the partnership between Ethiopia and the Hainan Free Trade Port. The impact of these transnational investments on fair growth and sustainable development is assessed, while exploring the evolving agendas and procedures governing investments. This research draws attention to how the law and legal cooperation between Ethiopia and China may promote mutually advantageous outcomes, promote transparency and governance mechanisms, and lessen the likelihood of disputes. This research on the factors influencing the future of the Digital Silk Road and its consequences for long-term, sustainable economic growth, and business in the area, aims to provide valuable insights for policymakers, development professionals, and academics, and for the copromotion of China and Ethiopia in terms of digital investment. This research relates to the promotion of the African Continental Free Trade Area (AfCFTA), in terms of construction and economic development. It also examines how the DSR raises concerns about data security and privacy, cross-border transactions, technology transfer, and cyberterrorism, as well as encourages digital investment, such as through enhancing digital governance regulations, modernizing international investment agreements (IIAs), and bolstering global health, coordination, and cooperation; the article concludes by analyzing the implications for Africa. The findings show that such cooperation would support Africa’s digital transformation and sustainable development, while strengthening China–Africa cooperation.