Steve Costigan arrives in Hong Kong in search of his former shipmate, Soapy Jackson, who has disappeared. Costigan learns that Soapy had received a letter at a saloon in another port, possibly containing money, but had left for Hong Kong. To raise funds for his search, Costigan agrees to fight the notorious Yellow Typhoon. After defeating him, Costigan is drugged and wakes up in the rebel camp of General Yun Chei. Yun Chei explains that he has an alliance with the White Warlord, General Feng, also known as Joel Ballerin or General Ironfist. There is a dispute between Yun Chei and Ballerin, and Yun Chei wants Costigan to fight and defeat Ballerin to undermine his prestige. Soapy Jackson, now disillusioned with the rebels, is in charge of guarding Costigan. Soapy reveals that the alliance between Yun Chei and Ballerin is due to their fear of a third warlord, General Whang Shan, who has an airplane and is a significant threat. Costigan and Soapy plot to escape, and during the fight between Costigan and Ballerin, they are attacked by Whang Shan's plane. They manage to flee in Yun Chei's car, but Soapy's attempt to return to the rebels results in an accident that damages Costigan's watch. Costigan pursues Soapy towards Hong Kong.