Addressing mounting concerns over elevated debt levels in China, the International Monetary Fund (IMF) said it is not concerned "in any major way" about a hard landing in the world's second largest economy that has seen an unprecedented expansion in credit in recent years.
"We are not concerned at this stage in any major way about a hard landing in the Chinese economy," Jorg Decressin, deputy director of research at the IMF told CNBC on Wednesday.
"What is clear is that there has been a lot of expansion of credit lately, especially outside the banking system. This will have to be monitored very carefully and the authorities will have to take measures to rein this in," he said.
Last week, ratings agency Fitch downgraded China's long-term local currency credit rating to A-plus from AA-minus, citing risks from rapid credit expansion alongside the rise of shadow banking activity.
(Read More: China Local Authority Debt 'Out of Control:' Auditor)
The shadow banking system is estimated at 22.8 trillion yuan ($3.7 trillion), equivalent to 44 percent of gross domestic product (GDP) and 25 percent of the total outstanding credit, according to Credit Suisse. It estimates that around half of the new credit issued last year was by shadow banks.