King Allfire announces to the dragon knights that the emperor of China has invited one of the knights to an exchange program with his son, Ho-Lee-Pow. He has a set of breakfast bickies (fortune cookies) in which whoever gets the correct fortune will be the one to go to China, but Sir Loungelot eats all the fortune cookies at once. Cinder and Clinker dig a hole that goes through the center of the earth to China, calling it the "Chinel". Loungelot and Flicker go through the hole into China while Ho-Lee-Pow arrives at Camelhot.
After eating, Loungelot looks for a toothpick and grabs a sword that is barricading a door, to use it as a toothpick. The door opens, and the New Year Dragon (who is a typical Chinese dragon rather than the usual humanoid dragons of the show) runs out, which the emperor says is bad luck. The emperor tells Loungelot to bring the dragon back, threatening to cook his tail in a stir fry if he doesn't.
When Ho-Lee-Pow cuts down all the plants in the garden, Sir Blaze calls him an ill-bred savage. When Ho-Lee-Pow insults Blaze, Blaze challenges him to a duel, in which if Blaze wins, Ho-Lee-Pow goes back to China, and if Ho-Lee-Pow wins, Blaze has to give him his red Scottish outfit.
As Flicker and Loungelot unsuccessfully try to get the New Year Dragon back to the palace, Blaze and Ho-Lee-Pow duel, with Blaze trimming the hedges to look like him throughout the battle. Flicker comes up with a plan, which Loungelot rejects. Loungelot angers the dragon by throwing a fruitcake at his head, and he chases after Loungelot. This distracts him long enough to build the Great Wall of China with Griddle's fruitcakes, keeping the dragon inside China.
Blaze finally defeats Ho-Lee-Pow, while back in China, when Loungelot asks the emperor for a toll charge, the emperor kicks him and Flicker back through the Chinel to Camelhot.
Ho-Lee-Pow had been hoping to lose a battle in order to pursue a career in the theater.
- Count Geoffrey's only appearance in this episode is the scene in which Ho-Lee-Pow beats his Evil Knights up.
- Princess Flame's only line in this episode is "Is he calling Blaze to a challenge?"
- The Chinel is a reference to Count Geoffrey calling his tunnel the "Chunnel", except sounding more like China