The war in the beginning of the movie is Japanese 1942 invasion of Shanghai International Settlement, a virtual colony administrated by several European and US governments, after the breakout of the Pacific War. The rest of Shanghai had already fallen in hand of the Japanese. But many scenes from the movie tells us the settlement was under Chinese control. Such scenes include: Chinese soldiers shooting the Japanese in street, workers tearing down giant portrait of Chinese leader - Chiang Kai-Shek, and slogans like “Resist to the End!”. China hadn’t recover the settlement till the end of WWII.