In chess, the term “zugzwang” describes a situation in which a player cannot skip a turn but any move he makes will put him in a worse situation.

That also neatly describes the situation facing the Chinese government as it cut interest rates on Thursday for the first time since the height of the financial crisis in late 2008, lowering benchmark lending and deposit rates by 25 basis points to 6.31 percent and 3.25 percent respectively.

With growth slowing much more than expected and an array of indicators pointing south, Beijing has been forced to act to prop up activity in the world’s second-largest economy.

But many economists and analysts from inside and outside the government are warning of the dangers involved in a fresh round of stimulus and easy credit that could reinflate a property bubble and exacerbate the stark structural imbalances already present in the Chinese economy.

“This rate cut is a clear indication the government sees further weakness in the May economic data [due to be released on Saturday],” says Stephen Green, an economist with Standard Chartered in Hong Kong. “But there’s obviously a risk that the increased focus on the short term undermines the structural reform agenda.”

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