The China Cloud enters the Hong Kong harbor through the western channel
Struan sees the Resting Cloud and transport ships with the flag of the East India Company, a Russian barque with the flag of the czar, and more sampans and junks than usual in the harbor
Struan also sees activity near Glessing Point and Europeans and beggars on the Queen's Road
Struan goes to the Resting Cloud and speaks with Captain Orlov, who agrees to go to the Arctic and bring back furs and sandalwood from the Sandwich Islands
Struan also asks Orlov to take Culum with him and teach him the fur trade
Struan gives Culum a letter for his mother and tells him about the trip
Struan is visited by Richard Crosse, who gives him a letter from his father, Sir Charles Crosse, a member of Parliament
The letter informs Struan that the British government plans to annex Hong Kong and wants his support
Struan agrees to support the annexation in exchange for protection for Hong Kong from the Chinese
Struan meets with Culum, who is upset that Struan is supporting the annexation and has made a deal with the British government
Struan explains to Culum that he is doing what is best for Hong Kong and the Noble House
Culum agrees to go on the trip with Orlov
Struan meets with May-May and Ah Sam and asks Ah Sam about the rumor about the son of his rival frequenting a brothel and mistreating the women
May-May and Ah Sam do not believe the rumor and May-May threatens to give Ah Sam a beating
Ah Sam swears that the rumor is true and says the owner of the brothel, Mrs. Fortheringill, told her