A Chinese Ghost Story III

The film opens with a flashback showing Taoist Yin sealing away the tree demon. He warns scholar Ning Tsai Shen that the demon will reawaken in one hundred years. This prologue sets up the looming threat that drives the rest of the story.

One hundred years later, two Buddhist monks, Bai Yun and Shi Fang, transport a golden Buddha statue. They meet the mercenary Taoist Yin, who reveals himself during their travels. The uneasy alliance hints at the conflict to protect the statue from looming danger.

While bargaining with a merchant, Yin accidentally cuts the roof off Shi Fang’s backpack, exposing the golden statue. This accidental reveal draws thieves and troublemakers who shadow the group. The danger escalates as they seek shelter for the night.

The monks decide to spend the night at the Orchid Temple. The bandits misread the temple’s haunting rumors and trigger a spectral scene, fleeing in fear. The tree demon materializes and kills the captured bandits.

While meditating, the Tree Demon uses Lotus to seduce Shi Fang. He discovers she is a ghost and repels her with mantras. Yet, showing compassion, he allows Lotus to escape rather than harming her.

Over the next several nights, Lotus returns to visit Shi Fang and the two grow fond of each other. The relationship complicates the mortal-ghost dynamic and foreshadows the choices Shi Fang will face. Meanwhile, the threat from the Tree Demon remains imminent.

Butterfly, Lotus’s rival, grows suspicious and plots to capture Shi Fang and expose the betrayal. The sisterly rivalry intensifies as the two ghosts vie for the Tree Demon’s favor. The tension sets up a critical moment in the looming confrontation.

When the Tree Demon tries to seize Shi Fang, Bai Yun intervenes and uses his staff to transport Shi Fang to safety. The master’s intervention demonstrates his protective power and the extent of their bond. The immediate crisis is averted, but danger remains.

In the ensuing battle, Master Bai Yun is captured by the Tree Demon. Shi Fang seeks Yin’s help to rescue his master and to recover Lotus’s urn. Yin agrees to join the effort, combining Taoist and Buddhist magic for the mission.

Yin and Bai Yun unleash a joint assault using Taoist and Buddhist powers to destroy the Tree Demon. The victory triggers pursuit by the Black Mountain Demon, raising the stakes for the next phase of the conflict. The balance of power shifts dramatically.

With the Tree Demon defeated, the Black Mountain Demon closes in and blocks their escape by summoning high pillars and darkening the sky. The group is cornered, forcing them to improvise a plan to survive. The battle moves from the ground to a skyward crisis.

Master Bai Yun casts a spell on Shi Fang, coating him with golden spiritual energy. Lotus lifts Shi Fang above the clouds so he can channel Buddha’s power to break the demon’s darkness barrier and allow the sunlight to return. The ritual blends Buddhist and Taoist power in a dramatic ascent.

The Black Mountain Demon is killed by sunlight as the sky clears. Shi Fang fears Lotus may have perished in the light, but he finds her alive, hiding under rocks and safe from the sun’s rays. Their survival hints at a lasting, if uneasy, bond.

Lotus explains that her spirit will follow Shi Fang as he takes her urn away from the temple. The revelation closes the immediate conflict while leaving the door open for their intertwined futures. It ends on a note of cautious hope and companionship.