The economy faces a major risk from the inefficient State-owned enterprises, which will also pose a challenge to the success of the government's latest stimulus measures, analysts said.

The new round of fiscal incentives to reverse the economic slowdown is sparking speculation of another round of massive investment that will again be dominated by SOEs.

However, "poor performance and the meager social contribution of SOEs are highly mismatched with the resources they consume", Mao Zhenhua, head of the Institute of Economic Research at Renmin University of China, said on Tuesday at a forum in Beijing.

According to data released by the National Bureau of Statistics over the weekend, SOEs' earnings fell 9.9 percent year-on-year to 457.8 billion yuan ($72.7 billion) in the first four months, while the net income of private businesses increased 20.9 percent.

Mao, who founded China Chengxin International Credit Rating Co, said if the low efficiency of SOEs persists, it will be a major risk for the economy in the next decade after the new stimulus program leads to more new debt.

"The SOEs have always been the major part of China's financial risks," Mao said.

He said that 1.41 trillion yuan in debt was "discovered" in the previous round of SOE reform, though banks were able to "digest" that sum thanks to a booming private economy.

"But a new round (of debt expansion) would be 'unbearable' and will have a huge impact on the economy," he warned.

Although he thinks China's total public debt scale is controllable, Mao suggested "debt ceilings" should be established for companies and local governments.

Global credit rating agency Moody's Investors Service granted central SOEs better ratings compared with their private-sector counterparts, citing the many benefits they had received, such as governmental support in times of stress and easier access to debt and equity markets.

However, the agency also warned of potential risks SOEs face, such as the entry of private companies in previously monopolized industries, as well as government-orchestrated industry consolidation, the exit of State investment from non-strategic industries, and higher dividend payouts to the State.

The agency also noted that many SOEs have not developed the talent and expertise to expand overseas. As a result, the risks of the global expansion that many are undertaking may outweigh the benefits of geographic diversification, it said.

Wang Tao, chief china economist with UBS AG, said although short-term government-led investment will allow the economy to bounce back a little, it can't sustain growth if private investment continues to be suppressed by weak exports and continued property curbs.

"To explore new drivers for growth, authorities need to speed up reforms such as lowering the pricing in the railway industry and reducing entry barriers to public services, and offering more tax cuts for smaller businesses," she said in a research note.

"The growth momentum of the Chinese economy after 2013 will be heavily dependent on the progress of these reforms," Wang said.