Following the Treaty of Shimonoseki ending the First Sino-Japanese War and the Triple Intervention, China was forced to pay a large indemnity to the Empire of Japan (230 million kuping taels equal to 8,600 tonnes of silver).

[1] Meeting with Li Hongzhang in Moscow during the coronation ceremonies for Tsar Nicholas II, Witte promised to maintain Chinese territorial integrity and suggested a secret military alliance against possible future aggression by the Empire of Japan.

In exchange, Russia would be allowed to use Chinese ports for its warships, and to build a Russian gauge railway through Heilongjiang and Jilin to Vladivostok on the Pacific coast.

[1] China was also not allowed to interfere with Russian troop movements or munitions and also had to grant Russia decreased tariff rates.

To avoid diplomatic issues with the other major powers, Li insisted that the concession be granted to the Russo-Chinese Bank, rather than directly to the Russian government,[1] making the railway nominally a joint project, although it was in reality completely financed and controlled by Russia.