Instalment 1 (1890)
Scene 1: In Li Hongzhang’s residence; Li is having a meal
In the 16th year of the reign of the Guangxu emperor (1890AD), China was at a critical juncture: The country was plagued by internal unrest and upheavals and by territorial infringements by foreign powers. In this scene, a subordinate reports to the Governor General of Beiyang,  Li Hongzhang, and informs him of the following current state affairs: the Beiyang Navy requires financial aid for its armament; under the supervision of the Governor General of Nanyang,  Zhang Zhidong, the Hanyang iron foundry has been successfully built; Japan is preparing its expansion onto the Chinese mainland.
Scene 2: At the Imperial Court; Cixi is performing a Kunqu opera
At the same time, an atmosphere of tranquillity and security seems to prevail at the Imperial Court. As a present for the 60th anniversary of the Empress Dowager Cixi the construction of the new Summer Palace has commenced. Already at this point, the project is costing more than 10 million Liang silver, but the financial situation threatens to put a halt to the construction of the Summer Palace. Therefore, the Empress Dowager Cixi orders the Chun Prince Yihuan (who is both the supervisor of the construction project as well as the Guangxu emperor’s biological father) to the Imperial Court to reprimand him sharply.
Yuan Shikai has successfully suppressed an uprising in Korea. Because he has fallen victim to an intrigue, he is hiding in a Beijing brothel in the room of the prostitute Shen Yuying. When he gets to know that Li Hongzhang has been summoned to the Imperial Court in Beijing, he immediately requests an audience with Li to seek for his patronage. Yuan Shikai thus bids Shen Yuying farewell and promises her that he will repay her kindness one day when he has become a successful man.
The foreign journalist Morrison interviews Zhang Zhidong, the Governor General of Nanyang, who enjoys the same reputation as the Governor General of Beiyang, Li Hongzhang; both are known as lead figures of the self-strengthening movement of the Qing. Morrison, comparing Zhang Zhidong to Li Hongzhang, argues that Li Hongzhang is more of a pragmatist since he places more importance onto practical aspects. In Zhang Zhidong, however, Morrison believes to find characteristics of an idealist. In order to refute Morrison’s opinion and prove that he is more than a mere idealist, Zhang Zhidong demonstrates the practical implementation of one of his own ideas by personally leading a group of journalists on a guided tour of the new Hanyang foundry.
The Guangxu emperor at the Imperial Court is confronted with the problem of an empty treasury. On the one hand, the Beiyang Army requires money for its armament. On the other hand, the construction project already owes debts of 7.5 million Liang silver. Accompanied by his personal tutor Weng Tonghe, and by the Minister of Revenue Yan Jingming, the helpless emperor makes his way to the palace of the Empress Dowager Cixi. The Empress Dowager is displeased by the persistence of the Minister of Revenue who insists that the construction works at the Summer Palace should be terminated in order to ease the financial burden. Finally, Cixi demotes him. At this moment, Li Hongzhang arrives at the Imperial Court.
 "Beiyang" is the name used during the Qing dynasty to designate the whole area of today’s Liaoning, Hebei and Shandong provinces.