When Tony Abbott swept to power last month, he declared in his victory speech that Australia "is under new management and . . . once more open for business".

The management – Abbott’s conservative Liberal-National coalition – may be new, but the challenges facing Australia remain the same: how to rebalance its economy as the decade-long mining boom comes to an end.

Growth is slowing in resource-hungry China, Australia's largest trading partner and by far the biggest purchaser of its exports. And that dependence is increasing – in the second quarter of 2013, China accounted for 35.4 per cent of all goods exported from Australia, its highest ever level.

Abbott underlined the importance of this relationship in his first appearance on the international stage as prime minister, at the Asia Pacific Economic Cooperation (APEC) summit in Bali in early October.

After his first meeting with the Chinese president, Xi Jinping, Abbott declared his determination to finalise a free trade agreement with China within 12 months.

It’s an ambitious deadline – talks between the two nations have been dragging on since 2005 and gone through 19 separate rounds but have stalled on China’s demands that restrictions on foreign investment be relaxed.

Give way
Another sticking point is China's refusal to raise quotas on Australian agricultural imports, such as wool, beef and dairy products, as it attempts instead to boost production domestically.

The fear in Australia has long been that the Chinese will buy up large swathes of Australian farmland if restrictions are eased.

However, after his meeting with the Chinese premier, Abbott indicated that Australia might be prepared to give way on a number of issues in order to secure a deal that will be crucial to Australia’s continued economic prosperity.

“I have always taken the view that you should take what you can get today and pitch for the rest tomorrow, when you have a strong foundation to build upon,” Abbott said.

Domestic discussions about Australia’s prospects are dominated by fears over the slowdown of China and the end of the mining boom.

In April, the IMF cut its 2013 growth forecasts for Australia to 2.5 per cent, down from 3 per cent, and it expects unemployment, currently 5.6 per cent, to rise above 6per cent for the first time in a decade.

But the country is in much better shape economically than much of the rest of the developed world, particularly when measured against some of the bombed-out economies in the euro zone.

It has avoided the recessions that have engulfed other nations in the wake of the global financial crisis and, partly thanks to the sizeable and swift stimulus package brought in by the Labor government in 2009, has an enviable record of 22 years of unbroken economic growth.

Australia is one of only eight members of the elite "9As" club – a country with a Triple A rating and stable outlook from all three of the major ratings agencies, Moody's, S&P and Fitch.

Earlier this year, Fitch reaffirmed its AAA rating, saying Australia “has remained one of the strongest performing economies in the AAA universe since the global financial crisis began.”

That confidence is not reflected in consumer sentiment, however, something that can perhaps be explained by the economic negatives batted back and forth in the election campaign.

Huge benefits
The Abbott camp highlighted Labor's burgeoning budget deficit while former Labor leader Kevin Rudd repeatedly warned voters about the dire consequences of the end of the mining boom.

This constant talk of the mining bust has, say some commentators, left Australians as "depressed and grumpy" as those in Europe and elsewhere who endured the Great Recession.

The mining industry, along with mining-related activities, accounts for almost 20 per cent of Australian GDP, and 10 per cent of employment. The country has certainly reaped huge benefits over the past decade from the “commodity super-cycle”, fuelled by demand from China and other emerging countries.

But are reports of the end of the mining boom overstated? Many in the industry believe they are, including Australia's central bank governor Glenn Stevens, who said in a recent speech that it's not so much that the boom is ending, more that it's "shifting gear, and that we are entering a new phase".

While this new phase will see lower capital investment in the industry – already reflected in the number of projects abandoned or mothballed and the thousands of workers laid off – more iron ore will actually be shipped from Australian mines in the years ahead, as the investment phase progresses to the export phase.

In Stevens’ view, “Australians will continue to benefit from the higher level of resources output for a very long time”.

Backing this view is the fact that the long-expected collapse in iron ore prices has so far failed to materialise, bucking the trend in other commodities. Despite predictions from some economists that the price would slide to A$70 (€47) a tonne, it remains above A$130 (€86).

One of Abbott’s key campaign promises was the repeal of Australia’s controversial carbon tax, brought in by the previous government. Since taking power, the new prime minister has made it clear that abolishing the tax, to be levied on Australia’s 500 biggest polluters, is his number one priority.

Repealing the tax and scrapping a levy on mining profits will boost employment and reduce energy prices, according to Abbott, and his stance is enthusiastically backed by the mining industry.

But there is fierce opposition from the Green Party and environmental groups. Australia is the developed world's worst polluter per head of population and the devastating bush fires raging through New South Wales have heightened the debate on climate change.

As a long-time member of the NSW Rural Fire Service, which is largely made up of volunteers, the prime minister has been out in the bush helping his unit with the desperate containment effort. This has provoked criticism that he should be paying more attention to running the country.

A recent report on the nation’s growth prospects should give Abbott some comfort as the debate over the mining boom and bust continues.

Australia has far wider strengths than its mineral resources, according to the accounting firm Deloitte, which recently identified five "super-growth" sectors – international education, agribusiness, gas, tourism and wealth management – which, if managed properly, could add as much as A$250 billion (€166 billion) to GDP over the next 20 years, potentially matching the wealth of the mining sector.

Fiona Walsh is business editor of theguardian.com