A flashback opens the film with a young man known only as He (Tony Leung) witnessing the devastating final bombing of Guangzhou in 1938. In a makeshift mine alongside other desperate survivors, the young He experiences firsthand the brutal toll of war—a memory that will haunt him as he ascends into a life of covert operations and double-dealings.
By 1941, shortly before the bombing of Pearl Harbor, the man now known as Director He has risen through the ranks to become head of Shanghai’s Political Security Department, a counterespionage branch operating under the supervision of the ambitious and calculating Officer Watanabe. Officially, Director He is a loyal servant of the Wang Jingwei regime, collaborating with the Japanese-controlled government in occupied Shanghai. In truth, however, He is living a double life. Alongside his wife, Ms. Chen (Zhou Xun), he secretly works for the Chinese Communist Party. The couple provides vital intelligence to the underground network dedicated to undermining the Japanese occupation through espionage and subterfuge.
Ms. Chen, an integral part of the Communist apparatus, works closely with the party’s secretary, Mr. Zhang (Huang Lei). In a quiet but determined manner, she maintains coded communications with her husband—using innocuous methods such as sending messages hidden within pastries from a local bakery. To those around him, Director He appears to be a dutiful, if ruthless, enforcer. He carries out his official duties with alarming efficiency, assassinating, interrogating, and torturing suspects as a means of earning the trust and confidence of Officer Watanabe, who is ever watchful for signs of disloyalty or ambition among his subordinates.
Within Officer Watanabe’s inner circle, figures such as Minister Tang (Da Peng), Captain Wang (Eric Wang), and a promising young officer named Mr. Ye (Wang Yibo) play pivotal roles. Watanabe himself is driven by a desire to amass political power through the puppet regime, yet he remains deeply suspicious of those under his command. In one incident, after secretly saving a Communist spy, Ms. Jiang (Shuying), when her own attempt to assassinate Minister Tang fails, Director He receives crucial intelligence about key Japanese figures—information that includes details on a Japanese Prince actively serving in the military.
Amid the turbulent political landscape, peace negotiations had been tentatively arranged between Japan and the Chiang Kai-shek regime. Under this plan, Japanese forces would be redeployed to counter the Soviet threat, while the Chiang regime would continue its bitter struggle against the Chinese Communist Party in exchange for de facto control of Manchuria. However, the new intelligence allows the Communist underground to launch a daring ambush. They assassinate the Japanese Prince and his brigade during what would be their final excursion, an act that shatters the negotiations. The prince’s death undermines the credibility of the puppet government and severely damages Officer Watanabe’s reputation.
Within the intricate web of alliances and betrayals, Mr. Ye’s personal life begins to unravel. His lover, Ms. Fang (Zhang Jingyi), a dancer and also a committed member of the Communist Party, takes part in the assassination of Minister Tang. The operation forces Ms. Fang to break off her relationship with Mr. Ye, leaving him to vent his anger by targeting random Japanese soldiers. Later, Mr. Ye learns of a horrifying act: Captain Wang, one of Watanabe’s trusted officers, has raped and murdered Ms. Fang due to her political affiliation. In the aftermath, Captain Wang mysteriously disappears, deepening the sense of treachery and moral decay within the ranks.
Officer Watanabe grows increasingly wary of Director He, especially after learning that He is related by blood—cousins—with the slain Minister Tang. Seizing on this connection, Watanabe decides to exploit Mr. Ye as his double agent. At the same time, the announcement of the attack on Pearl Harbor sends shockwaves through the region. The Wang Jingwei regime, now facing mounting pressure, declares war on both Great Britain and the United States, leading to the complete Japanese military occupation of Shanghai. In this climate of escalating conflict, Mr. Ye is drawn closer to Watanabe, who seeks to further his political ambitions by leveraging Ye’s loyalty and the covert network he controls.
As events spiral out of control, Mr. Zhang—already disillusioned—attempts to flee with Ms. Chen, only to discover that she has been married to Director He all along. Desperate and motivated primarily by self-interest and the hope of some semblance of peace, Mr. Zhang decides instead to surrender to Shanghai’s Political Security Department. In a twist of fate, the intelligence he provides inadvertently falls into Director He’s hands. Recognizing the threat posed by this betrayal, He orders Mr. Zhang’s execution and later visits his wife to ensure her safety.
The atmosphere in Shanghai grows even more perilous when Officer Watanabe, determined to eliminate any potential threats to his power, orders Mr. Ye to move against Director He. A bloody and brutal confrontation erupts at Ms. Chen’s apartment. In the ensuing melee, Mr. Ye returns to Watanabe heavily injured, reporting that he has managed to arrest Director He and that Ms. Chen has been killed. Satisfied, Watanabe rewards Mr. Ye by promoting him to the position of his new secretary and sharing with him a detailed map of strategic territories and intelligence aimed at consolidating Japan’s occupation of China through control over Manchuria. With this new information, Watanabe and Mr. Ye depart for Manchuria to further their political and military careers.
After the Japanese surrender in 1945, Director He finds himself disguised as a political prisoner. However, his incarceration is short-lived; he is soon released. As he exits the prison, he observes a prison truck arriving, carrying among its prisoners none other than Officer Watanabe and Mr. Ye. In a moment of quiet vindication, Mr. Ye silently mocks Director He as the truck drives past, while Officer Watanabe laughs at He’s futile attempt to retaliate. Later, in the privacy of a prison washroom, Watanabe confides in Mr. Ye that he has lost all ambition to pursue political power now that Japan’s grip on Manchuria has crumbled. Watanabe laments the fall of what he considered Japan’s greatest stronghold, even musing about starting anew as a simple farmer. He even remarks that both he and his comrades would likely receive immunity for their past crimes. Mr. Ye, however, cuts him off with a cold implication that Watanabe’s time as a Japanese officer is over.
It is then revealed that Mr. Ye has been playing a dangerous double game all along. Under Director He’s orders, Mr. Ye deliberately cultivated Officer Watanabe’s trust, all the while working covertly as a double agent for the Chinese Communist Party. Mr. Ye explains that the fall of Manchuria was orchestrated by the very intelligence Watanabe had provided him, in exchange for promises to kill Ms. Chen and arrest Director He. In a dramatic turn, Mr. Ye uses Director He’s own knife to kill Officer Watanabe. After meticulously cleaning and returning the blade to its owner, Mr. Ye cements his betrayal. Director He, waiting in a nearby office, expresses his gratitude to Mr. Ye for his unwavering loyalty and effective execution of their covert plans.
In an unexpected twist, the film reveals that Ms. Chen is alive. In 1946, Ms. Chen, Director He, and Mr. Ye are shown living modest, unassuming lives in Hong Kong—a far cry from the world of espionage and political intrigue they once inhabited. In a quiet moment, Mr. Ye is seen buying coffee for Ms. Chen at a local café, a subtle but poignant reminder of their shared past. Later, he visits a restaurant operated by the family of Captain Wang. Here, Captain Wang’s parents recount their escape from Shanghai following their son’s mysterious disappearance, expressing hope that he might still be alive somewhere in China. To avoid drawing suspicion from Captain Wang’s sister, Mr. Ye departs swiftly and seeks solace in a nearby temple, where he unexpectedly encounters Director He, who is deep in prayer.
Eventually, Director He returns to Shanghai, making his way to a bakery that has continued to operate—a silent testament to the coded correspondence he once maintained with his wife through simple pastries. As he stands before the familiar storefront, he reflects on the long and winding journey that has brought him to this moment, the personal sacrifices, the betrayals, and the intricate interplay of loyalty and ambition that defined his life.
In a final, revelatory scene, the film cuts back to Captain Wang, who confesses to Mr. Ye about the circumstances surrounding Ms. Fang’s death. Initially skeptical and distrustful of Mr. Ye, Captain Wang attempts to shoot him. However, he soon discovers that Mr. Ye had removed all the bullets from his gun—a silent admission of his true allegiances. Mr. Ye then openly declares his allegiance to the Chinese Communist Party, leaving no doubt about his long-concealed double role. In a swift and brutal act, Mr. Ye kills Captain Wang, explaining the mystery behind his disappearance and permanently sealing the fate of those who had once betrayed their ideals.
Through a labyrinth of espionage, shifting loyalties, and personal tragedies, the film presents a vivid tableau of wartime China—a world where the lines between friend and foe blur and where every action is weighed against the heavy price of survival. The narrative of Director He, Ms. Chen, and Mr. Ye is a study in the ruthless pragmatism required by espionage, as well as a lament for the lost ideals of loyalty and honor amid the relentless tide of history.