Australia has the 13th largest economy in the world and one of the largest in the Asia-Pacific region.
The 'island-continent' ranked third in the Index of Economic Freedom, the Heritage Foundation's measurement of 10 factors that include business freedom, trade freedom, government size, fiscal freedom, property rights, investment freedom, financial freedom, freedom from corruption and labour freedom.
The country was ranked second in the United Nations 2009 Human Development Index, first in Legatum's 2008 Prosperity Index, and sixth in The Economist worldwide Quality-of-Life Index for 2005.
Melbourne achieved second place on The Economist's 2008 World's Most Livable Cities list, followed by Perth, Adelaide and Sydney in fourth, seventh and ninth place respectively.
Australia, which has the 11th highest per capita GDP in the world - beating the UK, Germany, France, Canada and Japan and on a par with the US - has grown at an average annual rate of 3.6% for over 15 years, in comparison to the OECD annual average of 2.5%.
Unlike most of the developed world Australia even avoided falling into recession following the 2007-2010 financial crisis, something economists attributed to its proximity to Asia, especially China. Demand from Asia, which was fairly insulated from the economic crash, for Australia's exports, particularly raw materials Australia has in abundance, like iron ore and wool, held up.
Exports to China, now its largest trading partner, grew 45% year-on-year in 2009
Exports to China, now its largest trading partner, grew 45% year-on-year in 2009. Australia's other major export markets include Japan, South Korea, India and the US.
So Australia is positioned enviably in the global economy. However growing ties to China do carry risks that might easily be overlooked.
Vanguard Investments chief economist, Joe Davis, explains: "If there's a risk in China in the next three to five years that I think many people don't talk about, it's the risk of China repeating the mistakes that we observed in the 1970s of being reluctant to rein in inflation, because the fear is it will knock down growth [in Australia]."
China is a major purchaser of Australian debt and in 2009 offers were made by state-owned Chinese companies to invest $22bn in Australia's resource extraction industry.
Australia is blessed by an abundance of natural resources, particularly in Western Australia. Ever-rising commodity prices are one factor that has helped Australia avoid the kind of collapse in revenues flowing into the public coffers that occurred in Europe.
This means businesses in Australia can count on a greater investment in transport and other business infrastructure in coming years than their European counterparts. Similarly, SMEs can be surer of a greater availability of public sector contracts and less chance of public-sector contract offers being withdrawn.
Australia's economy is dominated by its service sector, representing 70% of GDP, in particular banking, finance, media, entertainment, and personal and business services. The service sector employs over 9.5 million people, 86% of the Australian workforce.
Healthcare was the biggest employer in the sector, with almost 13% of total employment, followed by the retail trade (12%) and construction (10%).
Service exports from 2009 to 2010 totalled AUS$52bn, more than half of which was accounted for by travel services, contributing more than AUS$33bn.
Welcoming more than five million visitors into the country each year and contributing around AUS$20bn to the economy annually, Australia has a well-developed tourism industry. The country has an abundance of seaside resorts in every state, as well as mountain retreats, national parks and fishing spots and wine-producing regions. Tourism accounts for almost 4% of Australia's GDP.
Backpackers, mainly from Western Europe and America, account for a significant portion of visitors, with many travelling on working visas to have an extended trip. By spending a lengthy period of time in Australia backpackers tend to explore more of the country and contribute more to the nation's economy.
Australia is also a major sporting nation. The 2003 Rugby World Cup attracted 65,000 international tourists to Australia, and during the 2000 Sydney Olympics the city hosted 362,000 domestic and 110,000 inbound visitors.
Melbourne, which hosts the Australian Open (tennis), Melbourne Cup (horse racing) and Australian Grand Prix, was named the Ultimate Sports City by SportsBusiness in 2010. The Melbourne Cricket Ground is the largest in the world (however it was a Sidneysider, media magnate Kerry Packer, who sought to transform the sport and took on its establishment in the 1970s).
Agriculture and mining
Australia's agricultural and mining sectors account for 10% of Australia's GDP and 57% of the nation's exports, making the country a major agricultural producer and exporter. The country is a major producer of wine, livestock, dairy, fish, wool and cotton.
Australia has suffered from droughts of increasing frequency and severity in recent years. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) has forecast that climate change mean rainfall levels will continue to drop, raising a number of challenges to Australian agriculture.
The contribution of manufacturing to Australia's GDP peaked in the 1960s at 25% and has since fallen steadily in line with the rest of the advanced economies - in 2006 it was down to 10.5%. However, it still represents a significant industry, with food and beverages accounting for the largest portion.
Automotive manufacturing has been diminished by the competitive advantages enjoyed by emerging economies in Asia but Holden, Ford and Toyota continue to manufacture cars in Australia. However, the industry has suffered from a growing trend of consumers switching to smaller, more fuel-efficient vehicles, because domestic manufacturers, particularly Holden and Ford, mainly produce large, fuel-inefficient vehicles.
The decline in the textiles trade, which accelerated following trade liberalisation in the mid 1980s, has been more precipitous, with most textile manufacturing, even by Australian companies, now done in China.