Such news is expected to further heighten investors’ concerns about China ‘s economic prospects.

But they are barking up the wrong tree, overreacting to the sharp falls in the mainland stock markets and currency volatility.

In recent years, some investors have fretted about the Chinese economy heading for a hard landing, but they have consistently been proven wrong. They tend to cite long standing structural weaknesses such as shadow banking, overcapacity, troubled property markets and local government debt levels.

But the truth is the nation’s economic fundamentals remain strong and it is making progress in rebalancing its economy towards consumer spending. For the first time, consumption accounted for more than half of economic growth for last year.

While the regional economies in the much developed coastal provinces are slowing and struggling to upgrade their economic mix, the potential for gains through infrastructure spending in the inland provinces is still huge.

Much of the current bearish sentiment stems from plunging stock prices but China’s stock markets, labelled by some as “casinos”, have never been a reliable barometer of the economy.

Investors looking towards the medium to long term should focus on the progress of the reform agenda, which aims to transition the country to a full market economy. Unfortunately, the signs are not very encouraging, which should be a bigger worry.

Ironically, “reform” is on lips of mainland policymakers every day. To highlight its importance, President Xi Jinping is heading a central leading group on deepening reforms to map out blueprints and enforce implementation. To be sure, China has made considerable progress in a few areas, including the internationalisation of the yuan and building up a very strong e-commerce sector.

But the recent currency fluctuations and massive capital outflow may have already slowed currency reforms. More worryingly, some officials and businessmen have complained that the overall reform drive has largely stalled. Certain key areas, like overhauling the state-owned sector, appear to have gone backwards.

In late 2013, leaders at the third plenum of the Communist Party’s Central Committee announced an ambitious reform blueprint promising sweeping reforms covering 60 areas. It vowed to allow market forces to play a decisive role in the economy and laid out detailed measures on how to achieve the goals, including reforming the state sector and giving equal status to private firms. At the time, many observers suggested that even if half of the measures were implemented, the economy would be on a much healthier track.

Two years later and there is little progress to show for it all. Take the state sector. Some would argue the opposite of what was pledged is happening. Anecdotal evidence shows that the government is pushing for mergers to strengthen their monopolies, while foreign businesses have bitterly complained they face what they say is unfair scrutiny and greater regulatory controls.

More ominously, instead of pushing state-owned enterprises to function along market principles, some companies are clawing back previously introduced reform measures and incentives.

One mainland industrial conglomerate with a number of listed companies in Hong Kong has cancelled stock option awards to managers even though the packages had already received board approval.

It even forced some managers who had already exercised the options and sold the stocks to return the money. This is just one of many shenanigans going on at the state owned enterprises.