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The operetta is set in Vienna and China in 1912. In act 1 in Vienna, the heroine Countess Lisa marries a Chinese prince and returns with him to his homeland despite the warnings of her friends and family. In act 2, in Peking, she finds that she is unable to come to terms with his culture, and especially that he must take other wives. He assures her that it is just a formality, but unhappiness is inevitable, and she is locked in the palace. Her love changes to hate. In act 3, Prince Sou-Chong is left alone while his beloved Lisa returns to her homeland. His sister, Princess Mi had also become attached to the Viennese official Gustav, and so the ending is doubly sad. But the prince respects the rule of his custom: always smile.
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