Zero has broadcast his communication with the high eunuchs around the Chinese federation, and their disdain has thrown the people into open revolt. The Britannians withdraw; an alliance with the eunuchs is worthless now.
But Kallen was turned over to Suzaku. She's his prisoner.
The Knights break out of the trap and the Xing Ke dispatches the eunuchs.
Lelouch and C.C. have effectively conquered China for a reason: to track down the secret order that gives people geass. They move when the leader changes. C.C. was the leader before, and V.V. is now.