China has done its best to ruin the scenery on the Yangtze River. Smog blots the sun. Factories dot the shores. And the construction of a giant dam has flooded the Three Gorges, the famed river passage through towering limestone and sandstone cliffs.

And yet, one afternoon this spring, a friend and I were staring in wonder from a cruise ship sailing up the Yangtze. We were in a world of green, gliding past cliffs covered in rain-slicked trees and bamboo bushes. Slender waterfalls churned into the jade-colored river.

"It is really beautiful. I can only imagine what it would be like on a clear, blue-sky day," said my friend, Maria Ines. "But even like this, it's magical."

Tour operators urged people to cruise the Yangtze before 2003, when the massive Three Gorges Dam plugged China's largest river. That created a reservoir expected to gradually fill over six years, driving up river levels more than 350 feet. Many people feared the ruin of one of China's iconic landscapes.

By the time we arrived at the Yangtze in May, about three-quarters of the flooding had occurred. More than 1,000 towns and hamlets had been submerged.

And yet, the Three Gorges were still stunning.

"Of course it's disappointing" that so many villages are gone, said Raynor Shaw, a geologist and author of "Three Gorges of the Yangtze River." But, he said, with the mountains soaring over 3,000 feet, the rising water isn't enough to destroy the natural grandeur.

"In terms of the scenery, it's still a gorgeous place," he said.

The Yangtze is no typical cruise experience. The river offers a panorama of beauty and ugliness, old China and new. We'd float through bucolic terraced farmlands, only to round a bend and confront 30-story office towers wrapped in haze.

Even choosing a cruise line was an adventure. Wary of the creaky, rat-infested tubs that some tourists have encountered in past years, we selected the Orient Royal line. The Chinese-run line was a little pricey, at nearly $800 per person for the four-night cruise from Yichang to Chongqing. But the firm boasted of a roster of rich American clients.

"Why not choose what Bill Gates chose," its Web site proclaimed.

Arriving at our ship, we wondered what had gotten into Bill Gates. The East King's decor was an exuberance of gold and red, all swirling carpets and flocked wallpaper, with the well-worn feel of an old Holiday Inn.

Still, the ship was spotless. And the cruise turned out to be a relaxing way to see a country fast-forwarding out of Maoist isolation.

SEE IT IN THE SPRING

We entered the first of the gorges shortly before 9 a.m the morning after boarding. Standing on the spacious observation deck, we looked out on misty mountains dotted with small pink farmhouses. In the soft gray of morning, everything felt dreamy.

"What color is the river? It's green like jade," said the Chinese guide, in her singsong English. That was no hyperbole. Spring is perhaps the best time to visit the Yangtze, before the rainy season has sent mud hurtling into the river.

Over the next 40 minutes, our ship zigzagged past rock walls like curtains. Some had mineral stripes of tan, gray and black; others were carpeted with thick green scrub, wide-leafed banana trees, ramrod-straight pines. Rocks jutted out in all kinds of formations.

At times, the mountains soared with majesty. Then the passages would narrow, and we'd feel a sense of intimacy with nature.

And then it was over.

Suddenly, we were back in the modern world, with chunky white apartment buildings springing from the shore like a giant Lego project. A bridge buzzed with traffic. Workers plinked away at a shipyard.

"You have reached the real China," a guide had told us that morning. She was referring to the traditional landscape; but the reality of China is pell-mell development, even in the heartland.

Indeed, even in the quiet of the gorges, we were rarely alone. About a billion tons of cargo travel the Yangtze each year, making it one of the world's busiest waterways. A parade of barges slipped past us carrying hills of coal, a reminder of the country's huge power demands.

The Three Gorges Dam is aimed at satisfying that appetite for energy. When finished, it will generate 20 times as much electricity as the Hoover Dam, offsetting some of the need for the smelly, polluting coal. Chinese authorities also hope it will help control deadly floods on the world's third-longest river.

DAM'S IMPACT HUGE

After lunch, we boarded a bus to view the concrete behemoth. The dam is typically described in superlatives: It's one of the biggest public works projects in history, longer than the Brooklyn Bridge and higher than the Washington Monument.

But when we finally reached it, we must have looked a little underwhelmed.

"Maybe it's a little different from your mind?" fretted our Chinese guide, Stephen.

Perhaps it was the smog. But the dam looked like — a big dam.

If the dam's appearance wasn't as dramatic as we'd expected, though, its impact is huge. As our guides explained, the government is relocating almost 1.3 million people from towns submerged by the rising waters. Red signs on the river banks mark 574 feet, the depth of the reservoir when the project is finished.

Along the Yangtze, clusters of sterile white apartment buildings are rising for the displaced. Traditional market towns have vanished. At one point, we glided by a graceful old wooden temple at the river's edge.

"In 2009, that will be underwater," the guide said.

It was difficult to get a sense of the human cost of such forced dislocation. Our Chinese guides shrugged it off, saying only the elderly objected. They insisted that younger residents were happy to be part of China's boom and welcomed their bigger, government-built apartments, with plumbing and access to supermarkets.

"They have wide houses," explained Annie, a 23-year-old guide in a bomber jacket emblazoned with "London" who led us through some Luray-like caverns near the riverside city of Fengdu.

"They have a new future — and a new TV."

Deirdre Chetham, author of "Before the Deluge: The Disappearing World of the Yangtze's Three Gorges," said many young people in the cities and large towns did indeed welcome the move. Though the old towns had architecturally interesting quarters, they also were filled with crowded, Soviet-style concrete apartment buildings from the 1950s and '60s.

"It was very exciting to get a new apartment, pick a new stove, pick out wallpaper — for those for whom it went well," Chetham said. But for rural families, the move was more traumatic.

"They lost the land they had tilled for generations," she said. "Large numbers of people were moved as far as 1,200 miles away."

Our guides' sanguine attitude was perhaps not surprising; they were all Communist Party "team members." They also dismissed environmental concerns about the river, assuring us that endangered fish and birds were bouncing back. Asked about the hazy air at the dam, Stephen emphasized: "Moisture! Not pollution."

Yet even the guides had to acknowledge yawning gaps between party propaganda and the vibrant, Western-obsessed country we were observing.

One day, a guide pointed to satellite dishes sprouting from a few farmers' houses. The government didn't allow them in urban areas, she explained, since residents might "learn the reality about the Chinese people" from English-language TV — and rise up.

Another of the "team members" was asked about China's economic system.

"Only the government thinks we are socialist," he said.

FLOATING LUXURY

The East King offered a glimpse of the increasingly capitalist China.

The four-story ship could hold 192 passengers, all in outside cabins with large windows, TVs, comfortable beds and decent-size bathrooms. Its spa offered foot rubs and "aromatic rose massages," and the bar served Australian wines. Onboard activities included a dumpling-cooking class and the inevitable karaoke. Crew members were unfailingly polite.

Food was plentiful. A breakfast buffet featured offerings from toast and eggs to Chinese noodles; dinner brought a procession of Chinese dishes, such as steamed buns with ground pork, chicken in lemon sauce, sweet-and-sour fish, and a variety of vegetables (including a spectacular dish of radishes in orange sauce).

There were occasional lapses. At lunch, the chefs did their best imitation of American food, which is how I came to be served a nice chicken cordon bleu — slathered with tartar sauce.

But the ships have come a long way from the days when rats shared the cabins. And in recent years, the Chinese have done some cleanup on the Yangtze. Though it's still polluted, I spotted none of the river-borne trash common in the past. (And not a single floating body, which my Beijing-based friend Ed had sworn was standard.)

That's not to say the cruise is as dramatic as it once was. Chetham, who has been visiting the Yangtze for more than 20 years, said the scenery still resembled an old Chinese painting, but "it's as though the bottom was cut off." Among the 40 passengers on our cruise — Americans, Canadians, Europeans and a few Chinese — were some San Francisco residents who recalled the cliffs soaring higher when they'd visited pre-dam. Even one of the shipboard guides admitted sadly, "So many beautiful sceneries have been flooded away."

And yet, no one thought the gorges were no longer worth visiting.

"For someone who's never been before, they're still pretty stunning," Chetham said.

The highlight of the trip came on the second day, when we took a side trip to an area known as the Lesser Three Gorges. In a driving rain, we boarded a small ferry to putter up the emerald Shennong Stream, between mountain walls lush with green bamboo bushes, leafy trees and a sprinkling of yellow flowers.

Mist swirled around the cliffs, as in an old Chinese landscape painting. As the water got shallower, we switched to small wooden craft called peapod boats, resembling wide canoes. Powering them were short, sinewy men in shorts — the storied Boatmen of Shennong, who had pulled boats through the clear, rapids-filled water for centuries, traditionally without the benefit of clothing. Thrusting their oars in the water, the men looked like wizards in their pointy-hooded rain ponchos.

Despite the boats' makeshift blue tarp roofs, we quickly became soaked. But we became almost giddy as we retreated further and further into a quiet, green-tinged world. We finally had the river to ourselves, with just the occasional farmer gliding by in a sampan. And for once, the air was fragrant and clear.

"There's no pollution" in the tributary, said our guide, a member of the Tujia ethnic group and a resident of the area. She gestured to the water. "If you wash your face, you may become younger and more beautiful."

As the water depth dropped to about a foot, our boat scraped onto a patch of rocks, and passengers remained in the vessel as the boatmen disembarked to pull it with a long grass rope. As they strained forward, the line suddenly snapped, sending our little boat pitching violently backward.

The men splashed over and tried again with a nylon rope. Wrapping it around their torsos, they heaved forward, muscles bulging. Finally, we slid over the stones. Boatmen and passengers whooped and laughed with relief.

As we headed back to our cruise ship, one of our boatmen began to sing a traditional, haunting melody in the local language. His reedy voice carried along the river, silent except for the rhythmic whoosh of oars. It seemed we had caught a glimpse of the old China so rapidly being obscured by modernization.

And then I realized that, unlike his colleagues, the 58-year-old boatman wasn't wearing a typical straw hat under his rain poncho.

He sported a Yankees cap.