China’s economy is reliant on too much debt and the enormous boom in credit risks leading to a new financial crisis, the International Monetary Fund (IMF) has warned.

GDP in the world’s second largest economy is set to grow by 6.7pc this year and 6.4pc next year, better than the 6.6pc and 6.2pc growth rates that the IMF forecast earlier this year.

Stronger global growth has given China a lift, as has extra government spending.

But in the years ahead, risks will grow as China’s extraordinary debt bubble keeps on building.