What the English subtitles completely missed.....
After deliberately looking for the English subtitles when I watch Lust Caution again, I realized that almost every mention of Chongqing, aka Chungking, that I caught was simply subtitled as "the resistance".
Historically, Chongqing was the inland "reserve" capital of China under the KMT/ Nationalist government where they fell back to after their original captial, Nanjing/ Nanking, was taken by the Japanese. Someone with IMDB Pro accounts should try to add this to the FAQ or trivia for IMDB's Lust Caution entry.
I apologize to everyone I have offended in my earlier posts where I pointed out it was obvious that the resistance was working for the KMT/ Nationalist government! I had no idea that this fact was completely obliterated in the subtitles (as far as I've noticed)!
This movie is full of homages and references and hardly any (conventional)exposition, so it is a pity that the English subtitles sometimes make little or no effort to translate or hint at the historical/ cultural context-- though I can't be sure how bad this is since I only glanced at the English subtitles from time to time. :P
*SPOILERS*
In the Chinese dialog of the movie:
1) Kuang mentions that he has had help from Chongqing after HK;
2) Old Wu mentions that he works for Chongqing; and
3) Mr Yee mentions breaking the Chongqing cells and capturing Chongqing elements, etc..
So there is actually no doubt in the Chinese "version" of the movie that the resistance was working for the KMT/ Nationalist government and that it was part of Mr Yee's job to hunt them down.