The Velvet Curtain

 is a Fallout 3 quest added to the game with the Point Lookout add-on.

The quest leads you to find the whereabouts of missing Chinese agent Wan Yang, and use the Submarine Self-Destruct Codes in her possession to blow up the stranded Chinese submarine SSN-37-1A.

Walkthrough
To start this side quest, travel to the Homestead Motel, north of Pilgrim's Landing. Enter Room 1D and activate the terminal. You will receive instructions to go to the lockers south of the motel and use a key to get into the locker. The key is located inside the briefcase on the bed. You can also start this quest by reading about the spy alert using a terminal in Turtledove Detention Camp's Administration building. Another way of starting this quest is to find a wanted poster like in the image above, then activate it. The quest should be added to your Pip-Boy.

Obtain the orders from the locked locker
Once at the locker (Located on the right side of the boardwalk coming from the ferry), open it and take the holotape Box 1207 - Spy's Audio Password. The holotape instructs you to go to the bank and use the password on the tape. It also informs you the safety deposit boxes can only be accessed by their voices.

Access safety deposit box 1207
At the People's Bank of Point Lookout, go to the the safety deposit box room and stand in front of the speaker. Activate the holotape you received from the locker. The speaker will say "Safety deposit access granted. Have a pleasant day" upon which box 1207 will open. Pick up the holotape "Espionage Debriefing". This tape informs you of Agent Jiang's mission to destroy a captured Chinese submarine and his search for another agent, Agent Yang.

Find Agent Yang
Agent Yang has the codes to destroy the sub within a false molar. The molar, unsurprisingly, is in her head. Exit the bank, turn right and a few steps eastward will have you at the Naval Recruiting Center, which is just beyond the walled bumper car arena. Go through the door behind counter on the left and activate the DiA Officer's Terminal. Access the file "Field Report - Yang Capture/Transfer". Read it to learn the fate of Yang being captured by U.S. officials and detained at Turtledove Detention Camp. Before you leave the room, don't miss the Mini Nuke on the table next to the computer.

Turtledove is directly north from the Recruitment Center. The camp is devoid of Swampfolk, but swarming with defense robots and ghouls. Enter the morgue through the cellar door, open Yang's remains locker and take the Submarine Self-Destruct Codes. You may escape the morgue the way you entered it (through cellar door), or you may use the hatch located near the cremation chamber, which leads to the Septic Tunnel. In the Septic Tunnel, you may pick some loot and exit to the east of the Turtledove Detention Camp, in the swamps.

Also, the Septic Tunnel might be a good way to enter the morgue without fighting a large number of Ghouls and Sentry Bots - investigate the area to the west of Turtledove Detention Camp, two or three squares away, while periodically checking your Pip- Boy's local map (as the entrance is not displayed at the world map) near the Trash Heap.

Blow up the Chinese submarine
The Chinese spy sub is underwater, to the south of the Calvert Mansion and near a pair of sunken vessels, just west of the lighthouse. Enter the sub through a hatch on the conning tower. Use the terminal in the bow to activate the self-destruct, and flip the failsafe switch in the stern. Before you flip the switch, however, use your Lockpick on a footlocker, which contains several valuable items, including a Power Fist. You'll have about 30 seconds to escape after leaving the sub, but you can stay inside for as long as you wish.

Not too far from the sub site is a ship far enough away from the blast radius that it can be used as a position to observe the explosion in safety.

Return to the motel
Head back to the motel, and receive your new orders from the safehouse terminal. You'll be asked to meet the head Chinese agent at his bunker, located under Calvert Mansion. The terminal directs you to a pair of Cryptochromatic Spectacles hidden within the toilet tank in the motel.

Head to the bunker
Travel to the Calvert Mansion and enter the remnants of a greenhouse to the west. Equip your Cryptographic Glasses now. The number of rings on each vase represents its number. Using the Cryptochromatic Sequence activate the vases. The sequence is 1_3_2_3_4_4_2. A hatch will appear on the floor next to the # 2 vase. If the hatch does not open, enter the code a second time immediately after, ignoring the 'wrong' sound effect, after entering the code a second time, the Chinese Bunker should open.

Escape the Chinese bunker
Inside the Chinese Bunker you'll notice a large amount of weapons and ammo, but will be beckoned by a Protectron. Give the robot the secret pass-phrase, and the bot will escort you to a room downstairs for your extraction orders. Don't follow the Protectron right away. There are numerous crates with various types of ammunition, and a Stealth Boy next to the door you came in, and a Stealth Boy and Mini Nuke on the shelf next to the doorway the Protectron leads you through. Enter the room, and pick up the Backwater Rifle on the shelf, next to the door, then activate the terminal. The terminal tells you that the funds for completing the mission have been wired to your next of kin and advises you to take your death honorably. The chamber will fill with radiation. To escape, you'll need to scale the nearby lockers and crates to a run-off tunnel or you can repair a button to the right of the door to unlock it. There is a vent on the floor that you can turn off with a 30 repair, and a door that 71 Science can open.

Entering the run-off tunnel, escaping through the door, or killing the Protectron will complete the quest.

Reward

 * 350 XP
 * Backwater Rifle
 * Cryptochromatic Spectacles
 * 7 Chinese Assault Rifles
 * Copious amounts of ammo including 5.56mm, 10mm, .44 Magnum, Microfusion Cells, etc.

Bugs

 * You may not be able to activate the self destruct even if you have the codes in your inventory. (Confirmed Xbox 360, Pc)
 * The circuit box, upon activation, will occasionally cause the game to freeze.
 * The terminal that tells you to go to the lockers will eventually have to be opened again and if you do the first speech option it will give you another quest marker that leads to the lockers but the lockers are empty, the quest marker is one of the firsts you get in the game so its like you have to do it again but you cant (Confirmed Xbox 360)
 * The door leading to the final terminal cannot be opened, pressing the electric switch results in nothing. To fix this, activate the switch using console. (Confirmed PC)
 * Upon entering room 1D you cannot leave it. The game freezes at the loading screen. To fix this, load an earlier save from outside the room, and then re-enter the room. (Confirmed PS3)
 * Attempting to leave the bank may result in the loading screen playing an infinite loop. (Confirmed PS3)
 * When getting the password tape the quest objectives still mark you to get the password from the lockers, you have to first play the "Contact Tape" when still being on the Homestead and then when you finish playing it, get the password. (Confirmed Xbox 360)

Behind the scenes

 * The initial orders found in the hotel room conclude with the line "Zhù ni háoyùn", which is Mandarin Chinese for "Wishing you good luck". However, the correct tones for the phrase are "Zhù nǐ hǎoyùn".
 * One of the terminals quotes the Chinese proverb 世上無難事，只怕有心人 (Shi shang wu nan shi, zhi pa you xin ren), meaning "Nothing in the world is difficult for the person who sets their mind to it"; Or simply,"When there is a will, there is a way".
 * Agent Wan Yang's Codename is "Five Claw Dragon" the five claw dragon traditionally appeared on the Chinese Imperial Seal.
 * The title of the quest, The Velvet Curtain, is a reference to The Iron Curtain, a phrase that represented the secrecy and tight borders that surrounded the former Soviet Union and the Eastern Bloc countries during the Cold War. The East Asian equivalent was known as the "Bamboo Curtain".