Peking, 1902. The Feng Tai Photo Shop is in a frenzy of preparation for the arrival of Peking's most important opera star, Lord Tan. Liu Jinglun (Xia Yu), the chief photographer, is oblivious to the chaos as he tinkers with a broken Victrola he has found in a junk pile on his way to work. His boss, Master Ren (Liu Peiqi), chides Liu for his incessant fascination with Western novelties, which he feels have no place in traditional Chinese society.
In the flurry of activity surrounding Lord Tan's photo session, a foreigner, Raymond Wallace (Jared Harris), arrives. Raymond has come to introduce "Shadow Magic," the first silent movies, to Imperial Peking. From their first flicker, Liu is captured by the magic of the moving images.
"Shadow Magic" unfolds against a backdrop of animosity towards foreigners. Peking is still smarting from the wounds caused by the Boxer Rebellion and the European occupation of the city. Liu must hide his friendship with Raymond from his employer, Master Ren, and his father, Old Liu (Wang Jingming). As Liu spends more time with Raymond and the "Shadow Magic" show, he starts to slip up in his work at the photo shop. He lies to Master Ren, never admitting that he's been working with the foreigner.
Liu's desire to learn the "foreigner's trick" also jeopardizes his relationship with the woman he loves Ling (Xing Yufei), the daughter of Lord Tan. Lord Tan is concerned that the "Shadow Magic" show and its Western influence will steal away his audience. Liu knows that he would be prevented from seeing Ling if his alliance with Raymond became public.
The conflict comes to a climax at the birthday celebration of the Empress Dowager. Lord Tan is to sing for her, Master Ren is to take her photograph, and Raymond is to show his films. Liu must choose between assisting Master Ren or assisting Raymond. He chooses Raymond and is disowned by Master Ren and his father.
On the momentous day, amidst all the pomp, the players are admitted to the Forbidden City. With much at stake for all involved, Raymond and Liu are commanded to begin the screening. The Empress loves the movies and the rest of the audience is enraptured. However, an accident occurs, producing tragic consequences for both men. Liu loses hope of ever accomplishing his dreams becoming a filmmaker and marrying Ling and Raymond is expelled from the country.
In Peking, China, the modern inventions and western technologies that are coming to photographer Liu Jinglun's (Xia Yu) small town have intrigued him. When an Englishman named Raymond Wallace (Jared Harris) arrives with talk of a "moving picture," Liu helps bridge the gap between Raymond and the Chinese, unintentionally defying the traditions of his culture in the process. Conflicted by his loyalty to his family and friends, and the opportunity to better his standing in society so he can marry the woman he loves, Liu must decide whether or not to risk everything to help bring the motion picture industry to China and make his dreams come true.
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