Cousin Octavia of Faction Paradox travels to Peking in the year 1900, escorted by Cousin Ursula of the Homeworld, who will be waiting for her in a train parked at a “ghost station” that was never actually built in this version of history. Posing as a distant relative of Miss Munroe, an upper-class Englishwoman who has come to Peking to help the less fortunate, Octavia manages to get an invitation to dinner with Dr Morrison, the Peking correspondent for the Times, and an archaeologist named Grieves. Grieves recently led an expedition to a legendary White Pyramid believed to have some relation to the goddess Kuan Shih Yin; however, his expedition was plagued with difficulties due to the bearers’ superstitious fears; at one point they even claimed to have seen the goddess herself appear over the entrance to the tomb. Despite these troubles and the increasing number of Boxer attacks in the countryside, however, Grieves managed to return to Peking with several relics, including the mummified body of a red-haired European woman, a jade casket, and some terracotta statues of warriors. Octavia has in fact come to Peking to steal the jade casket, but when her shadow touches it, she senses that another individual with witchblood is wrapped up in the casket’s history, and must let go before her own past is rewritten.
Grieves gives Morrison his journals, hoping to get them published, and Morrison walks Octavia home to Miss Munroe’s. Octavia intends to steal the casket, get out and rewrite history so that she was never at the dinner party and can’t be traced; however, when she returns to the Legation, she learns that Grieves has been found murdered in a locked room with the shattered remains of one of the terracotta warriors. The Legation then receives visitors from the Royal Palace: Commander Meng Rong Kuan, a court official named Xu Dian Ning, and their female translator, who seems to have a strange aura about her. Meng is here to demand the return of the artefacts from the Pyramid, and when he learns of Grieves’ death he concludes that Grieves honourably chose to commit suicide to atone for the shame of robbing the Pyramid. Octavia tries to use some of Grieves’ blood to look back through history and see what happened to him, but the protective animal spirits in the chamber drive her out.
The Boxers are growing bolder and the telegraph lines into Peking have been cut, leaving the Westerners isolated in increasingly hostile territory. Octavia decides to call in the Red Burial, loyal Faction recruits that she’d moulded into the forms of Anastasia’s personal guard in order to catch her by surprise during the attack on the Thirteen-Day Republic. However, most of the Red Burial is occupied with the battle on Mohandassa, and Ursula warns Octavia that something is blocking the safe temporal routes out of Peking, locking down the city so they can’t escape. Determined to complete her quest, Octavia returns to the Legation, but the Boxers make their move, killing foreigners all throughout the city -- thousands of ritual executions that serve to lock down history and trap Octavia here. Octavia finds that the Grieves’ servant has been murdered and the artefacts from the temple taken, and Ursula decides to call off the mission and wait for rescue.
Octavia refuses to give up, but when she leaves to search the city for some sign of the casket, she is attacked by mysterious warriors wearing red headbands. The warriors drive her to the Hanlin Yuan, Imperial China’s 1000-year-old library, and then suddenly break off their attack and retreat -- just as Octavia sees Meng and his men taking the artefacts from the pyramid into the library. Morrison then finds Octavia and insists that she return to safety in the Legation, and they arrive just as the Boxers begin shooting at the Legation. Mrs Grieves is fatally wounded, and as she dies slowly in an upstairs room of the hospital, Morrison demands to know why the casket is so important to Octavia. Octavia explains that it’s linked the legends of the Eight Immortals; she believes that the casket itself holds the secret of true immortality, and this is the only era in its history in which there is tangible evidence that it really exists. But to her shock, and Morrison’s, they see that the Hanlin Yuan has been set alight, burning a thousand years of history -- and presumably the casket as well.
Once the shooting has died down, Morrison and Octavia visit the ruins of the Hanlin Yuan, where Octavia pockets a Daoist mirror and finds the shattered remains of the mummy’s coffin. She is injured when the floor gives way beneath her, and her blood contaminates the sliver of jade from the coffin, meaning that she can no longer use it to trace the casket. She is forced to return to the Legation, where the dying Mrs Grieves claims to have seen a ghost -- and Octavia sees Time bending around the image of a woman in white. Octavia concludes that the “ghost” is one of the Great Houses’ timeships, but knocked out of phase, which can only mean that the War has come to Peking. Morrison then calls Octavia to the courtyard, where one of the Legation’s defenders, Mao Lie Wei, has been shot -- and is cursing Grieves’ name as he dies, since he was one of the bearers on the cursed expedition. Octavia takes Mrs Grieves’ blood in one hand and Mao’s in the other, triangulates their histories back to the points at which they made contact with the casket, and traces the casket’s history to the present day and its current location.
Despite Morrison’s protests, Octavia follows the trail out into the city, ignoring the Faction battleship that she can sense located just outside the web of ritual that has locked down Peking. Her witchblood and the mirror she stole from the museum guide her through the paths of the city, while her shadow defends her from the physical attacks of the Boxers. In the streets outside the Forbidden City, she finds the body of a court official holding an ivory disc, an invitation to the court -- and when she takes the disc, the ritual barriers around the Forbidden City part to let her in. Inside, she traces the casket to a room full of clocks, gifts presented to the court by Western dignitaries; however, none of the clocks have been set to exactly the right time or are running at exactly the same speed, and the confusion in Time affects her witchblood. Another woman has broken into the room to steal the jade casket, and as Octavia tries to fight her off, she finds that her opponent can perceive her shadow attacks and evade them. The two women fight their way to the casket, and when both touch it at the same time, they recognise each other...
Xu Dian Ning has summoned his niece, Liu Hui Ying, to the Forbidden City, to act as a translator for Commander Meng. Liu attends an audience with the Dowager Empress, Ci Xi, who explains that she is sending Meng to the British Legation to recover the artefacts stolen from the tomb in the northwest. Liu listens in as Meng and Xu question one of the expedition’s bearers, Mao Lie Wei, who has since seen the error of his ways; desperate to feed his family, he joined the expedition before learning that the foreigners intended to disturb a burial mound. The bearers were led by Zhong Ju Mu, a scholar who lost face when the edicts of the Hundred-Day Spring were repealed; Zhong claimed not to see any of the omens plaguing the caravan, not even the appearance of the goddess above the tomb. Mao, however, is convinced that as the foreigners left the tomb, he saw the terracotta warriors move in the flickering light as if starting to follow them out.
Xu and Meng do not believe Mao’s tales of ghosts, but do believe that Grieves has artefacts that must be recovered; they will visit him tomorrow to demand their return. Xu and Liu return home, and on the way, they see the Boxers conducting rituals to protect themselves from bullets. The rational Liu believes that the Boxers are using blank cartridges and blunted swords to impress the credulous peasants, but Xu warns her not to be impolitic about her beliefs. What he does not yet know is that Liu has her own reasons for visiting the city, and that she has learned the external fighting skills as well as the gung fu arts of healing. That night, Liu slips out of the house to visit her disgraced cousin, An Nuo, and asks him to warn her friends from Guangzhou about Meng’s presence in the city; Meng, of the Manchu dynasty, has been overzealous in hunting down those Han who supported the Hundred-Day Spring, and is responsible for the deaths of many of Liu’s friends.
The next morning, Liu accompanies Meng and Xu to the Grieves’ home, where they find that Grieves has been killed in a locked room -- and Liu catches a glimpse of Octavia lurking in the background. Meng concludes that Grieves honourably chose to commit suicide to atone for the shame of robbing the Pyramid. Liu tries to warn him and Xu that the foreigners do not consider suicide to be honourable, and that Morrison may write things that cause the Empress to lose face abroad. She is put firmly in her place and continues to translate without further editorialising. They return to the Forbidden City to report to Ci Xi, but when they arrive, the reactionary Prince Tuan herds them into a courtyard with a group of servants and has his guards press a crucifix against their foreheads. Anyone who cries out in fear or pain is executed on the spot for consorting with foreign gods. Liu and Xu survive the ordeal, but the delay costs them their chance to speak with the Empress, and the Chief Eunuch, Li, thus provides Xu with an ivory disc, an invitation to the party that the Empress intends to throw.
Xu and Liu return home, only to find the house papered over with yellow pamphlets accusing them of consorting with foreigners. With nowhere to run, the family barricade themselves inside the house to sit out the rebellion, but at night, Liu slips out secretly to fulfil her own agenda. Her people, the Han, have been oppressed by the ruling Manchu dynasty for centuries, and many of Liu’s friends have been slaughtered as the Manchu reverse the reforms of the Hundred-Day Spring; she is thus determined to seize the jade casket, an ancient Han artefact, so her people can use it as a rallying symbol to rise up against the Manchu. By the time she gets to the Grieves’ house, it has been burnt to the ground, but she bribes a young boy in the street to tell her that Meng has taken the treasures to the Hanlin Yuan. She bluffs her way into the library past the guards, but before she can take the casket, Meng confronts her and reveals that he’s had his men set fire to the library, using the Boxer uprising as a pretext to destroy all of the centuries-old wisdom and history of the Han.
Liu attacks Meng, but he knocks her senseless, takes the casket as a gift for the Empress, and leaves Liu in the library to burn. As she succumbs to the heat and smoke, she has a vision of the mummy returning to life. However, she is rescued from the flames by two mysterious warriors wearing red headbands, who dump her outside without a word. Weary, she returns home, only to find that she’s been missed. Xu lashes out at his disobedience niece, but she has had enough of the way her family treats her; they have taught her foreign languages and customs to use her as a translator, but they punish her when she tries to adapt the foreigners’ ideas for her own benefit. She thus cuts her ties with her family and seeks out An Nuo in the night city, and he directs her to the home where her friends from Po Chi Lam are staying. On her way to the house, she sees the ghost-like figure of a woman in white, and is reminded of her vision of the mummy, but dismisses it as a hallucination.
Liu’s friends, Kwok Wing Jo and Peng Tan Hao, welcome her into their home and allow her to rest and recuperate. Her old teacher, Gai, is also staying at the house, and he advises her to give up her quest for the casket before it becomes an obsession. Liu accepts his rebuke, but that night she dreams of the casket; in her dream, the goddess Kuan Yin is dressed as the Dowager Empress, and when Liu finds the casket in her palace, she is transformed into a phoenix locked in combat with a dragon that has descended from the sky. She awakens, convinced by her dream that it is vital that she reclaim the casket, and Gai allows her to go peacefully rather than part on harsh terms. Liu returns to Xu’s home and steals his ivory disc, breaking her last ties with her family by this act of theft. She then dresses as the scholar Li, one of the Eight Immortals, and infiltrates the costume party in the Forbidden City. There, she sees that Ci Xi has indeed dressed as Kuan Yin, the goddess of compassion. She manages to slip away from the party, and a vision of the woman in white leads her to a room full of clocks, with the casket at its centre. She overpowers the two guards on duty, but then Cousin Octavia breaks into the room to steal the casket. Liu reacts instinctively when Octavia’s shadow slashes at her with an invisible blade, and the two women fight their way to the casket -- and when both touch it at the same time, they recognise each other...
As long as Octavia and Liu are in close contact, their witchblood interacts, causing their past histories to become entangled. However, neither is willing to let go of the casket, until it splits in two of its own accord, leaving each of them holding half. The Dowager Empress then enters the room, still costumed as the goddess of compassion, but Octavia realises that it’s the other way around; this is the timeship Compassion, disguised as the Empress. Compassion reveals that she’s the one who locked down the city to keep out Octavia’s reinforcements, and points out that, since this mission has proven more dangerous than anticipated, Octavia now has little choice but to return with the casket or lose favour in the Eleven-Day Empire. Realising that she cannot defeat Liu here and now, Octavia flees with her half of the casket, intending to trace the rest through history and seize it at an earlier point in its existence.
Compassion informs the shocked Liu that she is a time-sensitive, and teaches her how to use a ritual chant to focus her concentration and see the trail that the casket has taken through history, as well as the lives of all those who have come into contact with it. Liu realises that she can use this power to go back through history and seize the casket at an earlier point in its existence, but Compassion warns her that she’s not yet familiar enough with her power to risk tracing the history of something so powerful and ancient as the casket itself. Instead, with Compassion’s help, Liu travels back in time one day, rewriting her own past so that instead of leaving her friends and breaking into the palace, she accompanied her friends to the British Legation to help the wounded. Morrison recognises her tending to the injured and tarries to speak with her, and as a result, he sees a man pinned down by sniper fire, rushes to his rescue, and is himself shot. As he dies in the hospital, he deliriously tells Liu that he’s been holding onto Grieves’ journal for Cousin Octavia, and Liu takes it from him.
Octavia plans to travel back in time with the Faction’s train, but without clear co-ordinates for the casket, Ursula refuses to do so. Octavia visits the Legation, only to find that Morrison is dead and Grieves’ journal has gone. Feeling guilty about Morrison’s untimely death, which can only be the result of his stumbling into the War thanks to her and having his history rewritten, Octavia returns to the train, orders the Red Burial to seize control from Ursula, and uses it to travel back in time one day and rewrite her past. She thus saves Morrison’s life by holding him back when he tries to rush to the aid of the snipers’ victim, and although he pulls free of her, he is only wounded in the leg. Morrison blames her for the man’s death, but nevertheless hands over Grieves’ journal. She returns to the train and uses both the journal and her half of the jade casket to calculate the co-ordinates, but the navigator gets conflicting information from the casket and is unable to pinpoint its location in time. Octavia orders him to make a random temporal jump towards the White Pyramid, but the train goes off the rails and crashes. Nevertheless, Octavia refuses to give up, and she leaves Ursula and the others to wait for rescue while she continues on foot, with the train as her anchor to linear Time.
Liu uses her witchblood to follow the casket’s trail back to the White Pyramid, but while doing so, she has a vision of the woman in white -- who is not Compassion after all, but has Liu’s own face. As the ghost reaches out for the casket, Liu has a vision of a dragon flying through the sky, and instinctively steps back through history to find herself on the plains near the White Pyramid, which is still under construction. Octavia is also there, and she realises that Liu instinctively hitched a ride with her. As they fight over the casket, however, an army of warriors wearing red headbands arrives -- the same warriors who drew Octavia to the Hanlin Yuan so she could find the casket, and who rescued Liu from the burning library. Octavia and Liu must fight together against this common enemy, especially when they discover that the warriors can survive fatal wounds. However, when Octavia hits one of her opponents in the forehead, she splits the headband and he shatters into terracotta fragments. Having found their opponents’ weakness, Octavia and Liu fight their way free and shelter in a nearby cave; however, in the process, they have lost both halves of the casket.
Back in 1900, the tangled rituals around Peking split open briefly, allowing Prester John and his reinforcements to enter the city. Wary of a trap, John sets off to look for Octavia while the others rescue Ursula and the Red Burial; however, he sees only the woman in white, a ghost with Octavia’s face. Compassion then contacts John and invites him into her timeship body, where he sees that she has reconfigured one of her internal rooms into a garden and has been holding Ci Xi captive without the Empress’ being aware of it. Compassion has thus been able to take the Empress’ place and gain access to the chi of the entire Chinese Empire, a power source that she’s been using to manipulate Octavia and Liu to ensure that events unfold as she wishes. Prester John realises that Compassion is building a time loop around them both, and from other clues in his environment, he deduces that this has something to do with her need for energy; unlike the other timeships, Compassion does not draw power directly from the Homeworld. He also realises that he is now part of the time loop, and Compassion, admitting that she just felt the need to explain herself to someone, releases Prester John after tampering with his memory so that he will forget about Octavia. Meanwhile, Commander Meng visits Xu’s home and burns it to the ground with his family inside when Xu refuses to tell Meng what happened to Liu. Homeless and friendless, Xu sees the Imperial Court fleeing the city as Western reinforcements arrive, and makes his own way out of Beijing, his future uncertain.
Octavia and Liu remain wary of each other, but realise that they have a common enemy and must work together to reclaim the casket. The warriors who attacked them are presumably the legendary terracotta warriors that the First Emperor stored in his tomb, and Liu identifies the symbol on the headband as the symbol of the Empress. Octavia and Liu collect pieces of terracotta from the battlefield, which upon examination prove to have words inscribed upon them; some are inscribed with the symbol of the dragon, and others with the symbol of the phoenix. Together, the phoenix and dragon represent two halves of the same whole, opposites working together in harmony. The warriors must have been placed in the tomb to protect the mummy, and when Octavia touched the casket at the Grieves’ dinner party, activating it with her witchblood, the warriors in Grieves’ study came to life and killed him. Grieves must have shot one through the forehead as it attacked him, which explains the shards of terracotta found near his body. Octavia finally realises that Compassion has manipulated her and Liu into this position, entangling their destinies for some reason of her own -- but, if she and Liu work together, they can construct terracotta warriors loyal only to them.
Octavia and Liu spend the next several days learning how to bake terracotta and designing pictograms that will make the resulting warriors loyal to them both. As they work, Liu teaches Octavia her gung fu fighting skills and Octavia teaches Liu the art of shadow fighting. As they grow more confident and relaxed, their witchblood interacts and they begin to share each other’s memories. Finally, they are ready to create their own warriors, and as the final step, they cut their hands, letting their blood mingle together and flow over the clay, thus binding their histories to the terracotta. When the ritual is complete, Liu finds that her shadow has begun to move of its own accord. Compassion’s warriors spot the smoke from the kiln and track them down, but this time, Liu and Octavia are truly fighting in harmony, and they manage to hold off the warriors until their own come to life and join the fight. Once Compassion’s terracotta warriors have been destroyed, Liu and Octavia go to the White Pyramid together, and find that the workers who were constructing it have been killed; the last two servants will be sealed up inside the Pyramid after lighting its eternal lanterns.
Compassion is waiting in the Pyramid’s crypt, where she reveals that the Pyramid is itself another aspect of her timeship body; this is why no other expeditions were able to locate it, as it had hidden itself within Chinese history. Octavia realises that this means the casket is also part of compassion, and finally, she realises what Compassion is doing to them. She and Liu are trapped in a time loop, forever acting out variations of an obsessive quest for the casket, each determined to seize it before their rival; history has repeated itself many times before, and on each occasion, one has either defeated or betrayed the other in order to seize the casket. But the casket is a battery powered by witchblood, and whoever seizes it will end up as a mummified husk, trapped in the Pyramid as the casket drains the energy out of their body. When the casket runs out of power in 1900, the loop starts over again with Octavia and Liu fighting for possession of the casket. The mummy is the body of the “victor,” as is the ghost of the woman in white, still obsessively seeking the casket that had stolen her life away. However, this is the first time that Octavia and Liu have co-operated for so long, and this time, they realise that the casket is just bait in a trap. Liu’s shadow moves by itself, catching Compassion off guard, and Liu and Octavia seize the casket and open it together. The power within the casket is released, and Octavia and Liu, the two opposites, merge into one whole and vanish out of Compassion’s reach. Having failed once, this plan is unlikely to succeed again, and Compassion decides to come up with a different way of getting the power she needs to survive. The next time through the loop, Grieves’ expedition breaks into the tomb in 1900 only to find that it is empty and the eternal lanterns have gone out.