China's central government will establish a leading group with a clear mandate to deal with growing debt, which has become a major concern for the world's second-largest economy, a senior government economist said on Wednesday.

Li Yang, chairman of the National Institution for Finance and Development, said that the central government is well aware of the possible risks of mounting debt - especially in the non-financial corporate sector - and will act to tackle the debt issue in a timely manner.

"The group to be established will play a key role in resolving the debt problems that no single major regulator or financial governor could tackle in the public, corporate and banking sectors," he said.

Li echoed the words of David Lipton, first deputy managing director of the International Monetary Fund, who warned on Tuesday of the debt problems. Lipton suggested that a well-staffed group is needed to specifically resolve the mounting debt and to address the associated banking consequences.

China has relied on debt-fueled stimulus for years, leading to rapid economic growth, and debt problems did not become apparent until economic pressure appeared, Li said.

Data from the institution show that China's total debt was 168.5 trillion yuan ($25.6 trillion) at the end of 2015, which is equivalent to 249 percent of GDP. The debt-to-GDP ratio of the corporate sector was estimated at 131 percent.

Although that is a high level of debt, it is not as intimidating as some investors had thought, Li said.

"The debt level remains controllable, and the possibility of a debt crisis in China is rather small," he said.

"China's savings rate is close to 50 percent," said Li. The debt problem in China is mostly internal and isn't likely to turn into a crisis, with enough foreign exchange reserve, he added.

"The government still has sizeable assets on hand to deal with debt problems," Li said.

Additionally, China has introduced methods to deal with debt problems, he said.

In response to concern over the limited effect of debt-for-equity swaps that are supposed to keep bad debt from piling up, Li said this approach needs to be propelled based on market principles and according to law, or disarray will ensue.

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