The Japanese (evil of course) kill everyone in a Chinese village. The only survivor of the village is Wang Yu (Jimmy Wang Yu) who has top kung fu skills (of course). He heads to Japan for revenge... and that is largely it. There are more subplots but they are rather underdeveloped. Wang Yu is accompanied (and occasionally scolded and advised) by a man who wears a basket on his head.
So, this is basically just a very long fight scene. But what a fight scene it is too, excellent and innovative fighting is shown many times. The xenophobia makes the film a bit too one dimensional and distasteful but the main problem with the film is that it is a bit incomprehensible.
The fighting though, which is the point of a film like this after all, is top notch.