There is an irony to the sell-off in emerging markets recently. It is the result of a rare dose of uplifting news from the developed world - the US economy is showing enough strength to prompt the Federal Reserve to signal a paring back of its quantitative easing program.

In tumultuous times such as these we must look at the economic fundamentals to separate the "signal" from the "noise". The key question today is: Are the emerging markets fundamentally broken, or is this a brief phase in which investors re-adjust their portfolios in light of the US recovery becoming more sustainable?

In Asia, the downward re-assessment of the growth trend in China has been singled out as a potential trigger for a regionwide downturn. Additionally, rising debt levels among Asian governments, companies and consumers following the 2008-09 global financial crisis, encouraged by unusually low interest rates, have raised concerns. Let us examine these factors to assess how worried we should really be.

In China, the government is overseeing an economic soft-landing because one of its strategic objectives is to restructure the economy from one which is driven by high levels of investment and exports to one driven by local consumption. The current model of growth has long been recognized as unbalanced, uncoordinated and unsustainable.

Thus, it should not come as a surprise that economic reform, rather than economic stimulus, is the rage in Beijing today. Policymakers have now set a 7 percent medium-term yearly growth target for the economy, and unless there is a significant deterioration in the economy, they are likely to focus on broader issues, which include promoting urbanization, fostering a level-playing field for the private sector and upgrading social services such as education and healthcare.

The recent action taken by the central bank to tighten short-term funding for banks is also part of the transformation process, weaning the economy off ultra-loose liquidity. The authorities are coaxing banks and businesses to be more aware of risks when making borrowing and lending decisions. This is encouraging news.

This leads to the rising concerns about debt levels across Asia. Our (Standard Chartered Bank's) recent study shows that an analysis of this issue needs to be carefully nuanced. Differentiation is vital; painting all of Asia with the same brush could lead to wrong conclusions.

After years of rapid economic growth, Asia excluding Japan's overall debt-to-GDP ratio has just reached the world average. However, on a more granular scale, our study of debt and solvency across corporate, household and government sectors in Asia concluded that current leverage levels are broadly manageable, with areas of concern and pockets of opportunity - areas where leverage can still rise to generate faster growth.