In the 1920s Pat Jackson destroys a Chinese post and is discharged from the Navy. Li Po Chang hires him to run a gunboat up the river. He drops Wildeth off at a mission for safety, but when his boat returns the mission is being attacked by communists. If he can drive off the communists he may be restored to the Navy and receive permission to marry Wildeth.

In Shanghai, Lieutenant Patrick H. Jackson is court-martialed and dismissed from the Navy for ordering his ship to fire upon a communist-held fort after they fired on his ship and killed two men because his order was in violation of a general order of the Commander-in-Chief. Pat's bitterness toward the Navy increases when he fails to find a job in Shanghai because of his notoriety. After he helps Wildeth Christie, the headstrong daughter of a wealthy businessman, escape a near-riot in a part of town in which she had been warned not to go, she makes a date with him for tea the next day. In a bar, when police find a young communist hiding, Pat is arrested for shielding him. In jail, when the youth is shot trying to escape, and Pat uses his own clothes for bandages and bribes a guard for water for him. After the youth dies, his father, Li Po Chang, obtains Pat's release and offers him work as a gunner on a ship he owns, the East Wind's Sweetheart , which he plans to use to carry arms to provinces whose warlords are fighting the communists. The next day, Pat dines with Wildeth, whose aggressiveness is attractive to him, yet after he kisses her, he tells her that he is not going to see her again. When Wildeth's father, who is upset about her daughter's infatuation with Pat, orders her to sail home, she sneaks onto Pat's ship. She is discovered after the ship has left Shanghai, and Pat refuses to talk to her. When she says that she will go home if he tells her he doesn't love her, Pat kisses her and makes plans to leave her at an American mission, after which she will return to Shanghai and meet him when he gets back. Wildeth, however, remains at the mission, and two weeks later, when the communists begin an assault on the waterfront, she assists as a nurse. The crew on the East Wind's Sweetheart see the fighting as they pass on their return to Shanghai, but when the communists fire at the boat, Captain Lobo Lornegan, an amiable and hard-drinking, but not very courageous officer, orders the boat to pull away. Pat, upset that the American flag at the mission is being flown upside-down, a signal of distress, threatens to fight Lornegan unless he gives orders to pull in to shore. Lornegan acquiesces and the Americans beat the communists in battle. Later, Pat, now married to Wildeth, is reinstated into the Navy.