To please Princess Fragrance, Kin-lung builds a Hui village inside the Palace. The Princess remains indifferent. . The Empress Dowager learns of Kin-lung's infatuation towards the Princess and orders to have her killed. Kin-lung comes in time to stop the execution and angrily takes her away: From the jade that the Princess is carrying, Kin-lung learns with indignation of her devotion to Ka-lok. He talks Ka-lok into giving up the Princess, in an exchange of his imminent action of a coup de'tat. Ka-lok begs to see the Princess for the last time. He takes her for a tour round Peking and tells her honestly of the situation. The Princess is bitter, but is willing to do what Ka-lok says.