Opportunities for Australia Amid China's Carbon‐Neutral Transition: Input–Output Approach With Analysis of Australian Renewable Potential

A tsunami of changes in China’s energy mix is underway as the country aims to achieve carbon neutrality by 2060. Amid these changes, Australia, as a key supplier of fossil fuel and iron ore resources to China, faces new challenges that could bring significant structural changes to its economy. To address these challenges, this study performs a comprehensive economic impact analysis for energy flows between Australia and China using static and dynamic input–output analyses based on the Environmentally eXended multi-regional Input–Output dataBASE (EXIOBSE). Additionally, the study integrates two competing economic stimulus scenarios—one for natural gas and one for renewables—into the dynamic input–output model to explore potential policy responses to the challenges. Key findings suggest that China's carbon-neutral transition negatively impacts Australia's major resource and mineral export industries, triggering spillover effects across other sectors. Furthermore, the findings indicate that Australia's shift to a renewable-based energy structure could lead to economic and environmental sustainability by reorienting the challenges into new growth drivers. Lastly, the study highlights the advantage of the EXIOBASE-based modular dynamic input–output model, which allows for more granular sectoral and temporal analysis, and presents the model's potential for diverse customisation across various policy planning domains.