Japan had been at war with China since 1937 before declaring war on the United States and the United Kingdom. During the conflict, Jamie Graham, a British upper middle class schoolboy living in the Shanghai International Settlement, is separated from his parents. He spends some time living in his deserted house and eating remnants of food but eventually he ventures out into the city and finds it bustling with Japanese troops. Jamie is captured along with Basie, an American sailor, who nicknames him "Jim". They are taken to Lunghua Civilian Assembly Center in Shanghai, but are later moved to Soochow Creek Internment Camp. By 1945, a few months before the end of the Pacific War, Jim has established a good living, despite the poor conditions of the camp. He has an extensive trading network, even involving the camp's commanding officer, Sergeant Nagata.
Dr. Rawlins, the camp's British doctor, becomes a father figure to Jim. Through the barbwire fencing, Jim befriends a Japanese teenager, who shares Jim's dream of becoming a pilot. Still idolizing Basie, Jim frequently visits him in the American soldiers' barracks. At one point, Basie charges him to set snare traps outside the wire of the camp and while Jim succeeds, thanks to the help of the Japanese teenager from the other side, the real reason for sending Jim into the marsh was actually to test the area for land mines. As a reward, Basie allows Jim to move into the American barracks with him. Basie then plots to escape.
Nagata visits Basie's barracks and beats him severely after discovering a stolen bar of Japanese soap. While Basie is in the infirmary, his possessions are stolen by other men in the barracks. One morning at dawn, Jim witnesses a kamikaze ritual of three Japanese pilots at the air base. Overcome with emotion at the solemnity of the ceremony, he begins to sing the Welsh song "Suo Gân". A few minutes later the camp comes under attack by a group of American P-51 Mustang fighter aircraft. As a...