In San Francisco's Chinatown on Chinese New Year's Day, a rug merchant spies a man with an English flag tattoo emerging from a curio shop. The rug merchant enters the shop and offers to sell the store owner $20,000 worth of diamonds. While the store owner examines the diamonds, the rug merchant finds a dead body inside a wicker basket. The police arrive and attempt to arrest the rug merchant for selling rugs without a license, but he manages to escape. The rug merchant removes his disguise, and it is revealed that he is actually Mr. Kentaro Moto. Moto makes a reservation on the Marco Polo ocean liner, which leaves for the Orient that night. Aboard the ship, Moto meets Bob Hitchings, son of the liner's owner. Bob is given an important letter to deliver to Joseph Wilkie, the manager of the liner's Shanghai office. Moto then notes that their steward Carson has an English flag tattoo. Bob and Moto become fast friends, as they learn that they were members of the same fraternity at Stanford University. The ship arrives in Honolulu, where Gloria Danton comes aboard and immediately attracts Bob's attention. The two fall in love, but Gloria warns Bob that he knows little about her. Moto finds Carson searching Bob's cabin and tells him that he recognizes the steward from the curio shop. The two men fight, and Moto throws Carson overboard. Arriving in Shanghai, Bob is distressed to learn that Gloria has left without him. When he gives Wilkie the important letter, the envelope is discovered to be empty. The two men call the elder Hitchings, who informs them that smugglers have been using their ships to bring contraband jewels and narcotics into the United States, and that the shipping line has already been fined $200,000 for this activity. Bob agrees to help Wilkie find the smugglers, but only after the two men search for Gloria. Meanwhile, Moto goes to the East India Bazaar where he meets Adram, who works for smuggler Nicolas Marloff. Adram immediately suspects Moto. That night, Bob receives a note telling him that Gloria works as an entertainer at the International Club. Wilkie warns Bob that the club is in a dangerous part of Shanghai, but the young Hitchings insists on going there. Moto and his female assistant, Lela Liu, also head for the club, but they are abducted along the way. Adram attempts to kill Moto, but instead is shot himself. At the club, Bob confronts Gloria backstage, and she confesses to really being Tanya, a White Russian emigrant employed by Marloff to discover Hitchings' plans. Marloff overhears her confession and takes them both as prisoners. Back at their table, Moto, Lela and Wilkie are greeted by Marloff, who offers to take Moto to his private gambling den. Moto tells Lela in Japanese to call the police for help, but she is shot by an unknown assailant just as she reaches the chief of police. Inside the gambling room, Moto tells Marloff that he is a smuggler, too, and suggests they join forces. Shown Marloff's prisoners, Moto suggests that Bob be ransomed and Gloria killed as a traitor. Wilkie enters the room and demands that Bob be released. The wounded Adram then arrives and identifies Moto as a police informant. As Moto tries to shoot Adram, Wilkie interferes, and Moto is shot instead. Just as Marloff is about to finish Moto off, the police arrive, and Moto shoots Adram dead. As Wilkie reaches for Marloff's gun, it discharges and kills Marloff. Moto then arrests Wilkie as the leader of the smugglers, as he killed Marloff to keep from being identified. When Moto is informed that Lela has been wounded, he finds the "smoking gun" on Wilkie. With the case solved, Moto tells all that he is actually the owner of the Dai Nippon Trading Company, the Hitchings' best customer, and a "sometime amateur detective." Bob and Moto then share a fraternal handshake as Gloria looks on.