This episode takes place in China: the parade is on Great Wall of China, the blue dragons are in the Forbidden City, the yellow dragons are on the Yangtze River, and the Emperor Dragon is on the top of K2.
The paintings are "Detail of Eight Views at the Confluence of the Xiao and Xiang Rivers" by Zosan, "Landscape: Summer" by Cai Jia, "Waiting to Cross a River in Autumn" by Zhang Lu, and "Peach Garden Land of Immortals" by Qiu Ying.