Ending? ** SPOILER WARNING**

I think the Japanese duelist definitely dies; he is stabbed in the stomach, flinches, tries to regain his composure, and fails, stumbling as the Chinese duelist walks away. He then proceeds to stab himself in the foot, to face Japan (probably), and to die standing up.

Here's why I think (or want to believe that) the Chinese duelist survives. Nearly the entire movie he talks about how unnecessary the duel is, and how he doesn't understand why they have to fight. Remember, he has that monologue about how it's sad to be a martial artist; if you're the best, people will always be challenging you, and if you're not, then you die. So in the final battle, he loses his fingers on his left hand, and loses his right arm completely. He can no longer hold a sword. No one will expect him to continue fighting after that. These battle wounds insure that he can never duel again. In short, he got what he wished for, and can honorably give up the martial artist's burden.

It's not that much of a stretch for someone to survive losing just an arm. He is seen walking away from the duel site, which I interpreted as his returning to his home. I know there are many fans of this movie who insist that the duelists are equal in skill, but I don't think there is enough evidence to support that claim either way. It would be a mistake to include cliche character dynamics from other movies in this way. As for my point of view, Hashimoto may have been Japan's best at the time, but he was no "Lord of the Sword."

You people forget that the Chinese fighter was stabed to, durring the fight, so my guess is that they both die.

in the end the chinese guy can walk(away) while the japanese guy can barely stand.

My take on it is that both win and lose. They kept talking about a fair fight. Remember the Chinese saves the Japanese from falling to his death as they fight falling among the rocks. You could say that the Chinese would have won there given its a fair fight. After all, the Japanese failed to compensate or predict for having lost footing when the rocks fell while the Chinese did and more over, the Chinese goes out of his way to save the Japanese from dying dishonorably by a sudden fall to the rocks below. The Japanese knows this but to be able to continue to seek honor in battle and even things up he stabs himself once they are back on the ground, intending to continue to fight all the way to the death even though the Chinese no longer wants to. After the last exchange, in a fair fight, the Japanese has won because by slicing his hand and arm the Chinese has lost due to the fact he can no longer even hold a dueling sword to duel. At that point, even though the Japanese has a bad wound - the Japanese would still have the strength to finish off the handless Chinese with one more blow. The film's script and the director goes out of its way to show that neither fighter struck anywhere near any vital organs during the match - meaning that even if they would die from loss of blood from their other wounds - it would probably take quite a while. The Chinese walks away after losing his hands because he knows those moves defeated him and he either will live or die in peace from there on, but due to his weariness from the battle (and from a life of being a dueliest which he was already growing sick of) he doesn't care whether the Japanese will follow him to perform a finishing blow. The Japanese, on the other hand, knows he could follow the Chinese to finish him off but knows it will take most all his remaining energy to do so because after all, at that moment, he could barely stand up. I think the Japanese, like the Chinese, at that point feels they have been betrayed by their countries/masters who both wanted to corrupt the purity and tradition of the duel to reach their own political ends (the Japanese shogun and ninjas betray him, the Chinese House of Swords master/duel host betrays the Chinese guy). So from there, both fighters have ultimate respect for each other and no longer wish to seek each other out in battle. The Japanese turns to face the direction of Japan, and like the Chinese, from there he will either live in peace or die in peace from his wounds. Whether you, as the audience, imagines that they either live in peace or die in peace is left open and up to your own personal interpretation.

Personally, I would think they decide to die in peace from their wounds. They both feel betrayed by their countries/masters and the Chinese is left hopeless/depressed because the woman he was falling in love with died for a pointless reason (the daughter of the House of Swords being accidentally killed by her corrupt father) and a reason that he was partially responsible for (after all he did take part in the fight where she was killed and his general involvement/meddling is what caused the daughter to be in that fight in the first place). The Japanese would be depressed with no reason left to live since the duel was over and he would feel sorrow for allowing his drive/aggresive nature toward taking part in the duel allow his all-important honor to become corrupt along the way (since he killed the Chinese monk). Remember his shock from being told to throw the fight by the ninja leader much earlier in the movie, from there I believe a rage against his country/leaders began to build inside him and began to corrupt him into making him want to carrying out the duel his way, at all costs. Additionally, both men might feel that there is nothing/little to go back to in returning to their own countries too since they would have to return with bad physical/mental scars and would have to return under the shadow of knowing how corrupted their leaders have been. Also, both men would feel fatigue from their battle wounds and as warriors, at that moment, may not feel they should live on with such scars/damage. In their fatigue, they instead decide to spend their last hours in meditation/prayer - dying as honorably as they can and dying in peace. They decide that hopefully God will forgive them of their sins or allow them to atone for them and have a fresh start in the afterlife.

Of course, I like the other interpretation that they would both live in peace as well (whether they return to their own countries or live elsewhere). There is nothing wrong with that either.

They both live, then they team up and go on adventures together, fighting against corruption and ninja magic (LSD) where they find it.

Wan would still have both arms, as continuity isn't all that important.