His proposal involved the establishment of a commercial enterprise reminiscent of the British East India Company, which would provide the government with tangible financial benefits while setting the stage for the peaceful conquest of the region.

To avoid complications with foreign powers, the concession was chartered as a private company in July 1901, and it was suggested that shares might be offered to Germany and France (although not to Japan or Great Britain).

In the interim, the Boxer Rebellion had resulted in a tremendous increase in Russian military influence in the area, and Russia was able to obtain similar concessions from China on the Manchurian side of the Yalu River.

[1] After the signing of the Anglo-Japanese Alliance, Tsar Nicholas dispatched Bezobrazov to the region in person, where he alarmed Admiral Alekseyev with talk of war with Japan, and the need to stop the withdrawal of Russian troops from Manchuria.

In 1902, with Witte out of favor at court, Bezobrazov was given almost unlimited access to state funds and was allowed to set up a private company called the Yalu River Timber Concessions.