IMF 'out of line' on China debt warning

Since the early 1990s, some China watchers internationally have, one after another, predicted a scenario in which the Chinese economy would experience a major recession, although it never happened. Now they seem to have found new ammunition for their argument: the country's rising debt.

Following the downgrading of China's credit ratings in May by Moody's, which cited the possibility of the country's continually rising debts, the International Monetary Fund warned this month that China's credit growth was on a "dangerous trajectory".

"International experience suggests that China's credit growth is on a dangerous trajectory, with increasing risks of a disruptive adjustment," the IMF said in a report. The IMF called for "decisive action" from China and suggested it press on with reforms to cut its debt levels.