During the time of the Imperial Court, Chih-hu was Regulator of the Calendar in Peiping (Beijing). He came from a long line of calendar regulators and was very good at his job: chrysanthemums would open on the very day that he specified. But the declaration of the Republic changed all that, and Chih-hu has fallen on difficult times. He has to support not only himself, but also his companion, an elephant called Chang who is three feet and six inches tall, and who is of great but uncertain age. Chang can communicate with Chih-hu by writing in the air with his tusks and trunk. He is eloquent, has a 'good literary style' and 'writes the words of an elephant of thought and taste' (p.11). He also 'seems to hover between the real and the not real' (p.11). In addition, Chih-hu must support his cook and companion, Wu Chih, former Rose Master at the Imperial Gardens.
Remarkably, after a failed attempt to obtain an insurance payout by setting his house ablaze, Chih-hu is offered a job in the insurance industry. Chih-hu takes the job, and is transferred to Shanghai. There, he has a chance encounter with a stranger, Renor Brighten Airey, who is Commander in the Celestion and Shanghai aeroplane service. When Chih-hu notes that fires are still fought on the ground, not in the air, Brighten Airey tells Chih-hu that this is not the case in Celestion, a major harbour city on the east coast of Australia. Chih-hu decides to go to Celestion to learn about flying fire-engines. He, Chang, and Wu Chih set off for Australia in Brighten Airey's plane.
After learning about fire-fighting, Chih-hu meets Senor Tortue, an entrepreneur who owns a sago-paste business in New Guinea. A recent volcano eruption has caused losses to his crop, and he seeks the help of Chih-hu and Brighten Airey to solve the problem of the volcano's damaging lava flows.
The men head to New Guinea, taking with them Pi Po, a possum who understands English and who has recently been adopted by Chih-hu. They fly over the crater of the volcano and there, through his telescope, Chih-hu can see that the dangerous volcano contains something utterly remarkable. A thousand feet down, there is something that looks like a small pile of greyish white dust, but actually it's 'the force that makes the world go round' (p.34). It's Yin-Yang. This could make their fortunes. The value of it, Chih-hu tells the others, 'will be greater than the whole of New Guinea' (p.34). They lower Pi Po the possum down the volcano's crater in a bucket to collect the Yin-Yang.
