Treasurer Chris Bowen on Thursday insisted an end to the Chinese resources boom was not a crisis for Australia's mining-driven economy, but admitted it was a challenge.

Australia's economy is facing a difficult transition from its reliance on commodities as China's growth slows and the resources investment boom peaks.

But on a day that ratings agency Standard & Poor's maintained its top-notch AAA sovereign credit rating for Australia with a stable outlook, Bowen said it was achievable with good governance.

"This is not a crisis. But it is a challenge," he told the national press club.

"The reality is that China is entering a new phase of its economic growth.

"What Chinese authorities are striving to achieve is stable, long-term single-digit growth. And that is the right approach. It's in Australia's national interests for China to go down this path."

Australia's economy grew at a slower-than-expected rate in the first three months of the year, expanding 0.6 percent on-quarter and 2.5 percent on-year suggesting the decade-long mining investment boom was unwinding

China's gross domestic product expanded 7.5 percent in the April-June quarter, data showed Monday, a second consecutive slowdown in growth as worries mount over the health of the world's number two economy.

Bowen predicted continued volatility in prices for Australia's key commodity exports such as iron ore and coal due to China's easing coupled with increases in global supply, underscoring the need to diversify towards other sources of growth.

"These transitions will occur inevitably," said Bowen, who inherited the Treasurer role last month after Wayne Swan resigned in the wake of Julia Gillard's ouster by new leader Kevin Rudd.

"The question is: will they be smooth or bumpy? Will the Australian economy benefit from them or suffer?

"Our challenge is in improving our productivity and competitiveness to assist in this transition.

"This is the key economic challenge for the next three years -- and lies at the core of Labor's positive plan to promote competitiveness to spur jobs and investment."

In reaffirming its AAA rating, Standard & Poor's said the Australian economy benefited from "significant fiscal and monetary policy flexibility, economic resilience, and public policy stability".

"We believe these factors provide Australia with a strong ability to absorb large economic and financial shocks, as was demonstrated during the global recession in 2009," the agency's credit analyst Craig Michaels said.

"Moderating these strengths are Australia's high external imbalances, dependence on commodity exports, and high household debt."