"I don't think we should pay too much attention to the fluctuation of the Chinese stock markets. It's not the most important part of the Chinese economy. What's more important is the fundamentals of the Chinese economic growth," renowned Australian economist and former Australian ambassador to China Ross Garnaut has said.
At the launch of the Australian National University's annual China report this year, entitled China's Domestic Reforms in the Global Context, he also expressed concerns over the drop of China' s productivity.
Garnaut is a contributor and one of the editors of the report.
"One of the (major) challenges (to the Chinese economy) is to keep up the productivity growth," he told Xinhua in an interview.
"In the long term, productivity determines whether the people gets richer, the country gets stronger economically. During most of the reform period, Chinese productivity has been very strong. But the last couple of years, it has been very weak," Garnaut said.
"I'm getting a bit worried about that. I think it's more important than what happens today or tomorrow in the stock market. "
To increase the productivity, Garnaut said, China needs to follow the reform program.
"Improving the market for finance, improving the market for goods and services, implementing government policy aimed at improving health and education and other services which improve human resources, these are the more fundamental things."
"The basic strategy of China is appropriate, but it's very hard to implement it. Making every effort to follow through the reform which has already been announced is the most important thing," he stressed.
"Whether it (the stock market) goes up or down another 10 percent will not determine whether the Chinese people are richer in 10 years' time from now. That will be determined by more fundamental questions."
"It will be determined by the success in moving from investment to consumption, by the success in introducing reform in the financial sector and in other markets, by China's success in the energy transition to a more low-carbon economy. These are the things that will determine the prosperity of the Chinese economy and future," he added.
Garnaut admitted that China's transition to the new model of economic growth is a very difficult transition, saying "I think what's more important is what progress China is making in the transition to the new model of economic growth, to what the Chinese leadership called New Normal for growth. That's more important than what happens day to day in the stock market."
He indicated that the contributors of the annual report are "cautiously optimistic" about China's economic development.
"We would say we are cautiously optimistic. There are very big challenges. No one in this book pretend it will be easy... China's reforms so far, its development so far in the reform areas have established a very good base there. But whether it will go from upper middle income into the high income country depends on these reforms."
Looking back at the history, he said, one takes some comfort from the fact that many times in the 37 years of economic reform, China has been faced with obstacles and overcome them.
"And looking at the history, one would be a bit optimistic, but looking at the challenges, one would have caution."
He also noted that the commitment of the Chinese people to change enabled the country to overcome all the past obstacles.
"I think the Chinese people didn't want China to be a poor, backward country... I think the thing driving reform and making sure all the obstacles are overcome is many Chinese people, tens of millions of Chinese people were determined that China will enjoy a higher living standard, the greater national strength that the developed countries in the world enjoy.
"That is why whenever China in the past faced up with big problems, it was possible to overcome them."
