The story is set in the last days of the Ming Dynasty, when the Manchu invaders were already in close proximity to the capital. Instead of fighting the enemy, the great officials of state devoted themselves to intrigues, corruption and self-aggrandizement. A few concerned individuals, mostly members of the literati, spent time in endless debates and took no practical action. It fell to a courtesan, the Perfumed Lady, to show them the way. Her young lover, Hou Fangyu, however, chose to relinquish the world, in spite of his earlier professions of patriotism. Broken-hearted, she retired to a convent and became a nun. Much of what appears in the book is factual. The principle characters were real people; even the fan existed.