IMF official warns of debt risk

China 'making progress' in economic transition, but high corporate borrowing could spell trouble

China is making progress on its economic rebalancing, but rising corporate debt could pose risks to growth in the medium and long term if the debt problem isn't solved, a senior official at the International Monetary Fund suggested in Beijing on Tuesday.

"China is making progress in many dimensions on its transition to a sustainable growth path, and the near-term outlook has turned more buoyant due to recent policy support," said David Lipton, the IMF's first deputy managing director, after a discussion with top Chinese officials and regulators in the financial sector.