 Back in Japan, Fuchida and Commander Genda Minoru formulate the new naval doctrines in which air-power will supersede the battleship as the prime weapon of the Imperial Fleet.In December 1937, Watson is on board the US Navy gunboat USS "Panay" on the Yangtze River near Shanghai when it is strafed and sunk by Japanese aircraft despite the vessel clearly displaying the American flag.A few days later, Stanford, now a journalist, has the misfortune to witness, and narrowly escape (with the assistance of German businessman John Rabe), the brutal atrocities committed on the Chinese civilian population of Nanking by the Imperial Japanese Army.