 This would prove to be a mistake, as Japan would end up occupying Korea by 1905 and expand into Russia's sphere of influence with the Russo-Japanese war, and then encroach upon Germany's port in Shandong during World War I.Within months after Japan re-ceded the Liaodong peninsula, Russia started construction on the peninsula and a railway to Harbin from Port Arthur, despite a protesting China.Eventually, Russia agreed to offer a diplomatic solution (See Kwantung Leased Territory) to the Chinese Empire, and agreed to a token lease of the region to save face, instead of annexing Manchuria outright, which was its effect.