Clear skies greeted the delegates arriving in Beijing for the last annual gathering of China’s parliament. At this year’s meeting of the National People’s Congress, the smog is thick and the economic gloom thicker. Market sentiment remains fragile, the latest data show a deepening slowdown in both industry and services, and capital flight is keeping the renminbi under pressure. A warning from Moody’s this week added to the downbeat mood: the US rating agency voiced a widespread fear that Chinese officials — previously able to engineer even the weather — may be unable to manage these strains.

Moody’s change of stance has little practical effect. China’s fiscal buffers and reserves remain vast. However, it underlines the depth of concern at the growing burden of debt in its economy and highlights the stark choice it faces on its currency regime. Even more striking is the loss of faith in officials’ ability to juggle the competing aims of short-term stimulus, long-term reform and financial stability. Credibility appears to be draining away as rapidly as China’s foreign exchange reserves.

Chinese officials have already acknowledged the need to communicate their policies better. However, it will take more than words to address these concerns. If capital outflows continue at their current pace, Beijing may be forced to choose within months between tighter capital controls — reversing previous reforms — and allowing a devaluation of the renminbi.