China's economy may soon start feeling some negative payback for stimulus policies that have helped growth to rebound but at the cost of rising corporate debt levels, according to a new paper from the Federal Reserve Bank of Kansas City.

The report's findings are particularly striking given that one of the coauthors comes from China's central bank, which tends to be fairly mum on potential economic vulnerabilities in the country.

"Our analysis indicates that the momentum of Chinese growth is likely to slow in the near term," Jun Nie, a senior economist at the Kansas City Fed, wrote alongside Yandong Jia, a researcher at the Research Bureau of the People's Bank of China.

The latest figures have painted a bright outlook for the world's second-largest economy. China's gross domestic product expanded at a 6.9% annual pace, according to official figures, while manufacturing and services surveys also pointed to renewed strength.

But the Kansas City Fed report suggests the new growth spurt may be more mirage than miracle.

"An analysis of its underlying forces suggests this momentum may not be sustainable," the authors wrote. "In addition, strength in policy-related variables has been waning, creating additional downside risks to near-term growth."

In other words, the government's heavy-handed role in sustaining a recovery in sectors that don't particularly need it, like steel, mining, and construction, has ultimately been economically unproductive.

"As China is transitioning from an investment- and export-driven economy to a more consumption-driven economy, the recent improvement in the manufacturing, investment, and trade group is likely to be temporary," the Kansas City Fed study said.

Other driving forces that may also prove fleeting include an export-boosting depreciation of the Chinese yuan at the end of last year and a rebound in global commodity prices and production, the report said.

Another telling admission for a People's Bank of China researcher: The official data is too opaque to allow for useful forecasting.

"China's official quarterly GDP figures have been criticized for being overly smooth and less informative," the report says. "Moreover, Chinese government policies have stimulated or cooled the economy at different times, further muddling the signal from economic data. To better assess whether the recent uptick in growth is sustainable, we use a factor analysis of monthly measures of Chinese economic and policy activity in key sectors."