Steven A. Tananbaum Senior Fellow for International Economics Robert Kahn argues that the idea of capital control is less radical than it seems; although comprehensive liberalization is theoretically the ideal option, capital controls may be China’s best chance to end the panic roiling global markets.

Since our August update, the eurozone crisis and poor global growth have fueled investor flight to dollars, despite the recent downgrading of the U.S. credit rating. As fund managers have moved money…