ct bywithholding low-cost government financing for the$30 billion project, the high-minded effort has hadlittle discernible effect on the massive venture. TheThree Gorges case, they say, is one of the most visible examples of such American initiatives, but there are many (Iritani 1997). The critics also contend that the ability of one nation, even a superpower, to cripple other governments by imposing economic penalties is increasingly ineffective in a global economy where foreign competitors will happily fill any void. They claim that the real victims of U.S. government sanctions are the American companies forced out of potentially lucrative markets and labeled as unreliable trading partners. And they call for a policy of “constructive engagement,” which entails maintaining economic ties while pushing for change through normal diplomatic channels and multilateral organizations. The Three Gorges Dam case is also an example of how efforts to promote trade come in conflict with political concerns. The issue is particularly relevant in considering U.S. foreign policy towards China. In its relations with China, the United States has long been torn between engagement and disengagement. This division is currently at work in trade policy, with experts advocating the necessity of free trade and activists leading public opinion by highlighting its costs. The renewal of China’s Most Favored Nation (MFN) trading status has been controversial ever since the Chinese government’s 1989 assault on pro-democracy demonstrators in Tiananmen Square. However, consistent with his predecessors since the 1970s, President Clinton argues that maintaining normal trade relations is the best way to integrate China further into the family of nations, promote American interests and ideals, and increase U.S. government influence with the Chinese government. In addition, if the United States were to revoke China’s normal trading status, i...
