The IMF has raised concerns over China's credit boom which has more than doubled in less than a decade, saying this can be "dangerous" for the world's second largest economy.

"China is a key contributor to global growth but also has notable vulnerabilities. Credit in relation to China's economy has more than doubled in less than a decade, to over 200 per cent. Credit booms this big can be dangerous," Tobias Adrian, Financial Counsellor and Director, International Monetary Fund (IMF) Monetary and Capital Markets Department said yesterday.

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"The longer booms last and the larger credit grows, the more dangerous they become," Adriano said while releasing the 2017 Global Financial Stability Report.

He, however, said Chinese authorities continue to adjust policies to limit the growth of the banking and shadow banking systems but emphasised that more needs to be done reduce vulnerabilities.

Adrian said the growth of credit in the Chinese economy has been very fast since the 2008 financial crisis and the overall level of debt is very elevated.

"The Chinese authorities are taking steps to contain leverage both in the banking system and shadow banking system.

They show some success in reining in credit growth, but in our view, more needs to be done. We do believe that the authorities are aware of that," he said.

"There is certainly coordination among the regulators within China. Internationally, the Chinese authorities are part of the FSB, the Financial Stability Board, and they are part of the Basel Committee. They are coordinating regulatory efforts in these international bodies along with the other nations that are part of the Basel Committee and the FSB," he said.

However, the IMF thinks that the Chinese economy has adequate buffers to weather any sort of change in global financial conditions, Matthew Jones, Assistant Director IMF's Monetary and Capital Market Department said.

Jones added that some of the domestic challenges which China is facing are manageable but urgent action is required to ensure its capability in reducing the rapid credit growth.

The IMF has called for strengthening the domestic financial system with supervisory attention on banks' emerging risks, especially rapid asset growth in the small, unlisted local banks and their increased reliance on wholesale funding and risks packaged into shadow products, he said.

"We think that staving off potential future episodes of a changing global environment or financial turmoil really requires a shift in the focus of policies toward reducing those financial vulnerabilities and less focus on achieving a specific growth target.

"That will help to ensure the success of the rebalancing that is undergoing in China and to ensure financial stability and sustainable growth," Jones said.