Qiantang, the Red Dragon of the South, had a wild and unpredictable temper - causing floods. He was eventually sentenced by Shangdi, the supreme ruler of Heaven, who shackled Qiantang to a pillar in his brother's palace dungeon. There he remained for 2,000 years when he won his freedom from a student who failed his exams and had to go home in disgrace, Liu Ye.

On his way home, Lui Ye bumped into a beautiful girl sadly tending goats by the River Qing. So sad did she seem that Liu Ye forgot his own troubles and asked what the matter was. The girl told him she was a princess who had been tricked into marriage by a tyrant who had cut her off from her family and made her work as a slave while he idled in luxury on her dowry. She begged Liu Ye to take a message to her father and he, of course, agreed, being already more than half in love with her.

Following her directions, he traveled to Donting lake, famous for its shrimp, and waited by a pine tree which the girl had described to him. Sure enough, there soon appeared as if from nowhere a palace guard who came and asked the student his business there. He explained that he had a letter for the girl's father and the guard agreed to take him if he promised to close his eyes until told to look again.

Liu Ye agreed and there followed a strange journey filled with the sound of water. Despite temptation, the student kept to his word and when finally he was allowed to look he found himself in a marvellous underwater crystal palace heaped with piles of gems and other treasure. Two lines of courtiers wearing the richest of silk robes led to a magnificent throne on which sat a handsome man with a flowing green beard, wearing purple and toying with a jade tablet.

Now, although everyone there had human form, Liu Ye immediately knew he was in the court of a dragon king and was terrified, but, remembering his charge, he approached the throne and handed over the letter. The king read it aloud and there was fury and grief in the palace when they learned of the cruel fate that had befallen their beloved princess.

This din carried to where the wild dragon Qiantang was chained in the dungeons below, and he was moved to such rage on his niece's behalf that he snapped the pillar to which he was shackled and exploded through the palace like a thunderstorm, crimson fire streaming from his eyes and the broken pillar trailing behind him like a reed.

In what seemed next to no time, Qiantang was back, in human form, and with the princess by his side. He had, he proudly declared, eaten the girl's wretched husband, the son of the dragon king of the Qing River. He had also, incidentally, caused a flood that had drowned 60,000 people, but for once had been so stricken with remorse that he had gone straight to Heaven to explain himself and submit to whatever punishment the supreme Lord of Heaven decreed.

Shangdi had been so impressed by this new humility that he had forgiven the Red Dragon and decided to restore him to his former glory as Dragon Lord of the South.

Then, to celebrate the freeing of both the princess and her uncle, a great feast was held for all the dragon lords of lake, river, and ocean. Liu Ye was naturally invited and in due course he and the princess fell in love, married, and Liu was granted all the powers of a dragon prince himself.