At a resort in Hangzhou, China, on Saturday, Bill Clinton, gave a speech to an annual business conference on China’s Internet. Mr. Clinton disappointed many, including the group Reporters Without Borders, which had asked him to speak out publicly in defense of Shi Tao, a journalist sentenced to 10 years in jail for leaking state secrets. What Mr. Shi actually did was forward to overseas Web sites an e-mail Chinese authorities had sent to the press apparently warning of the dangers of reporting on last year’s anniversary of the Tiananmen Square massacre of democracy protesters. “I would have raised it in the speech to the Internet people had I known about it,” President Clinton reportedly said of Mr. Shi’s case, the day after his speech, citing also a bad cold that had kept him uninformed.

Mr. Clinton’s omission of Mr. Shi’s case is less interesting as the latest example of a prominent American censoring himself while doing business in China than as an occasion for reviewing the claims Mr. Clinton himself made for the Internet as a liberalizing force in China.

Five years ago, as president, Mr. Clinton harnessed excitement about Internet technology to bring about an historic change in U.S. policy toward China. Big companies and trade associations of the technology industry enthusiastically joined the Clinton administration’s massive campaign to win China “Permanent Normal Trade Relations.” No longer would Congress have an annual debate over whether China’s behavior justified its enjoyment of trade status just like those of other countries. And with Permanent Normal Trade Relations adopted, China’s way was cleared to membership in the World Trade Organization.

At the time, Mr. Clinton dismissed Chinese authorities’ efforts to prevent the Internet from being used to spread ideas of freedom and civil liberties as “like trying to nail Jell-o to the wall.” Mr. Clinton should have known better. His State Department catalogued the Communist Party government’s creation of large police units to track the Internet and the resulting arrests of Internet dissidents and essayists.

Even then, American technology was not playing the completely positive role that its PR claimed. The chief executive of the Electronic Industries Alliance, Dave McCurdy, told me at that time that his members wanted to be in on the ground floor of China’s Internet development, even if China’s government interfered with it. He would rather American products be blocked than those of its competitors, he said.

Since then, it has become clear that American technology is not spreading freedom in China “by cell phone and cable modem,” as Mr. Clinton grandly predicted. Increasingly, it is being used effectively against journalists and against democracy and human rights activists. While denying that Cisco is “knowingly” helping Chinese authorities with their efforts to police the Internet, a top Cisco official nevertheless confirmed in a letter to the Washington Post that Cisco products “available to Chinese police forces are identical to those we sell to police forces at home and around the world in full compliance with U.S. laws.”

Adherence to law is at the crux of the dilemma American businessmen and policymakers face. At Saturday’s conclave, the head of Yahoo, Inc., Jerry Yang, confirmed that his company provided information that was used to convict Mr. Shi. “We don’t know what they want that information for, we’re not told what they look for,” said Mr. Yang, according to an AFP story available on Yahoo News, at least in America. “If they give us the proper documentation and court orders, we give them things that satisfy both our privacy policy and the local rules.” In 2002, Yahoo, Inc. and many other Internet portals also signed a pledge not to allow postings that would “jeopardize state security and disrupt social stability.”

Mr. Yang’s claim that he has to comply with local law sounds good, but “law” in China is not law as American businessmen are expected to understand it. It is not drafted by elected representatives, or enforced by judges empowered by a constitution that places the rule of law over other sources of power, like the state and the Communist Party. Moreover, Mr. Yang and his colleagues aren’t required to do business in China, they simply want to.

Rather than leave it to the consciences of America’s business and trade associations, why not prohibit the sale of Internet technology for use by China’s police and security forces? And why not bar U.S. companies from cooperating with foreign authorities in cases like Mr. Shi’s?

America’s China policy has not adapted to the fact that American technology is assisting the Communist Party keep itself in power.

Mr. Clinton doesn’t seem concerned that China’s Communist Party is winning the struggle for control of the Internet. That much is obvious from his failure to mention Mr. Shi in his speech. And if there was any doubt, he trotted out the other famous tenet of his administration’s China policy – the idea that economics and politics can be kept apart. “So far the political system and restraint on political speech in the Internet has not seemed to have any adverse commercial consequences,” Mr. Clinton said, according to the AFP. Isn’t it supposed to be the other way around?

Ms. Bork is deputy director of the Project for the New American Century and a contributing editor of The New York Sun.