British forces attack and easily take control of Chinese fort called the Bogue, with no casualties
Chinese send fleet of junks and fire ships against British ships, but they are easily destroyed due to superior artillery and maneuverability
Conversation on bridge of British flagship, the H.M.S. Vengeance, focuses on ease of victory and Longstaff's desire to have China Cloud tow the Vengeance upriver
Admiral resists this idea and becomes angry at Longstaff's suggestion, saying it is ridiculous and he will transfer headquarters to the China Cloud instead
Longstaff frustrated with Admiral's stubbornness and ongoing tension between Army and Navy over who should have precedence in the war
Also annoyed with Culum's scheming and potential danger it poses to relationship with Tai-Pan
Struan and May-May secretly on China Cloud, leading the British fleet
Struan thinks about the war and how it will affect the Noble House and China trade, and reflects on relationship with son Culum and determination to make him the Tai-Pan
Struan and Jin-qua negotiating deal where Ching-so will agree to start trading with British immediately and pay half of ransom for city, with the other half to be paid six months later
Trade will continue until the last British ship is loaded and paid in silver
Ching-so plans to attack and plunder British establishment once trade is normalized, and use fleet to burn and destroy merchant ships
Jin-qua impressed with plan and believes it will lead to British attacking Peking in revenge
Struan threatens Jin-qua, saying if any harm comes to his wife or children, Tai-Pan will send dragon that breathes fire to eat the city of Canton
Jin-qua goes to secret meeting wearing red ceremonial robe and participates in ritual sacrifice
Jin-qua believes Tai-Pan's "dragon" is a metaphor for a steamboat or warship
Jin-qua waiting for Struan's final order for opium
Struan annoyed that May-May has not returned from Macao yet
Struan's daughter Mary has chance at winning prize at dance for best dressed woman, but may have competition from Shevaum
Longstaff wants Struan to attend meeting with other merchants to discuss opium trade
Struan plans to use meeting to try and increase price of opium
Jin-qua will attend meeting as well, representing Chinese merchants
Longstaff wishes to establish a free port in Hong Kong
General and admiral disagree, with general advocating for use of military force to establish British law and order in China and admiral suggesting expulsion of all Orientals from island
Struan suggests issue of anarchists be addressed first and proposes establishment of a police force