Infernal Affairs II

In 1991, Hong Kong police inspector Wong Chi-shing (Anthony Wong) meets with his informant, Hon Sam (Eric Tsang), while Lau Kin-ming (Edison Chen), Hon's prospective mole within the Royal Hong Kong Police Force, assassinates Hon's triad boss, Ngai Kwun. Lau is later greeted by Hon's wife, Mary (Carina Lau), who casually ascertains whether he has any reservations about his mission for Hon. While giving him cash, Mary advises Lau to maintain a low profile. She also confesses that she was the person who ordered the hit on Ngai Kwun, admitting that Hon has no knowledge of this transgression and urges Lau to remain silent. Mary wants Hon to replace Ngai Kwun as the triad boss.
Meanwhile, instructors at the police academy discover that Chan Wing-yan (Shawn Yue), a promising but troubled cadet, is the half-brother to Ngai Kwun's heir, Ngai Wing-hau (Francis Ng); he is subsequently discharged from the force. Chan is later approached by Wong, who asks him why he wants to be a cop; Chan replies, "I want to be a good guy." Wong subsequently makes Chan into an undercover agent for the police, sending him to prison to get close to one of Hon's henchmen, "Crazy" Keung (Chapman To). Meanwhile, Ngai Wing-hau takes his late father's place as triad boss; he is the only Ngai child directly involved in the family business. With Ngai dead, four other triad bosses, known as the "Big Four", dismiss Ngai and debate on whether to pay their tithe to his family. However, Ngai blackmails with his knowledge of their mutual betrayals. Hon acts as an agent provocateur for Ngai in this affair.
By 1995, Chan has become a small-time gangster while Lau rises as a rookie cop. Chan's continual association with Hon and Ngai causes his girlfriend to have an abortion because she does not want their child to follow in Chan's footsteps. Ngai wishes the troubled Chan to be integrated into the Ngai family and invites him to his daughter's birthday party, where he announces that he is retiring to Hawaii and is dividing his former business amongst the Big Four, also giving Hon the Thai cocaine racket. Meanwhile, Hon leaks information about criminal dealings to Lau, who is able to apprehend many local gangsters and earn a promotion in rank.
During Ngai's next drug deal, a Morse code message from Chan tips off the police about an abrupt change of plans for the meeting, allowing the kingpin to be arrested. However, a videotape found in Ngai's suitcase reveals that Wong conspired with Mary to have Ngai Kwun killed, giving the triad leverage over the police. As he is being taken in for questioning, Ngai initiates his plan for vengeance against his father's murderers: the Big Four are killed by Ngai's men; an ambush awaits Hon in Thailand; and an assassin edges towards Mary. Mary manages to escape danger with help from Lau and Keung, but is betrayed by Lau when she rejects his romantic feelings toward her. She is run over by Ngai's henchmen at Kai Tak Airport.
In 1997, Lau is picked as one of the officers to preside over the ceremony signifying Britain's handover of Hong Kong to China. Ngai attempts to enter politics, but his support disintegrates after Hon betrays him to the police. Wong brings Hon back to Hong Kong under witness protection, but Ngai manages to kidnap his family in retribution. However, during the confrontation between Ngai and Hon, it is revealed that Hon's Thai associates are also holding Ngai's family hostage in Hawaii and that the woman being held hostage is a decoy. Wong arrives with a task force and guns down Ngai, who dies in Chan's arms. Moments before succumbing to his wound, Ngai discovers the wire in Chan's jacket and realizes that his half-brother is an undercover cop.
Hon's tactics against Ngai lead to a falling out between him and Wong; shortly after their final meeting, Ngai's entire family is murdered. The pieces are set in place for the first film: Hon goes down the dark path of replacing Ngai as the main triad boss, becoming Wong's new foe; Lau is a police inspector and Hon's mole; Chan is forced to remain undercover, returning to join Hon's triad. As the handover ceremony takes place, Hon sheds tears over the loss of Mary before hosting a party. Back at police headquarters, Lau handles a case involving a young woman, coincidentally also called Mary, who becomes his wife in Infernal Affairs.

Question: who has become a small-time gangster?
Answer: Chan.