When the Bank of Japan’s governor said that capital controls could prove “useful” to Beijing in its efforts to calm fears about China’s currency and monetary policy, he was going against international, and recent Chinese, orthodoxy.

But Haruhiko Kuroda was also shining a spotlight on the impossible trinity that Beijing faces: the ability to manage interest rates and the exchange rate while simultaneously moving towards a free capital account.

Beijing officially maintains that it has no plans to roll back capital account reforms that recently earned the renminbi International Monetary Fund recognition as an official reserve currency. But reluctance at the People’s Bank of China to loosen liquidity and anecdotal evidence of tighter foreign exchange management suggests that behind closed doors it, too, shares Mr Kuroda’s concerns. “December was a shock,” says one person who advises Chinese policymakers. “The reserves loss has changed the game.”