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* the Flags go 2 steps (never 1) forward (never otherwise) until they go out of
their territory where they move as Chariots.


Your abovementioned rules is original from ±ç²Ð¥ô 's essy book: ¨â¯ë¬î«BêuÀHµ§ . He lived drung Daoguang Emperor. 

I learned the game from ¹Ï»¡¤¤°ê¥j¥N¹CÃÀ � ,and the Flag moves as the rules in this book. The rules in this book are based from ¬L¥NÂO®Ñ.

I am also confused by two kind version of rules. I decided to choose the version from ¬L¥NÂO®Ñ. As it is older than ¨â¯ë¬î«BêuÀHµ§ . 

* the Fires moves 1 step diagonally forward and cannot retreat. I was not aware of
any promotion after outing their territory.

Right! I am sorry that I increased the power of  Fire for more playablity, and didn't write the change. The Fire does not get any promotion. I have fixed to the original move of Fire.

http://pika.cs.nctu.edu.tw/lit/FriendsChinese.rar


Thanks for your ardent questions.