Having conquered Eastern Turkestan, the Chinese next took steps for the recovery of Ili. Without the metropolitan province the undertaking of Tso Tsung Tang would lack completeness, while indeed many political and military dangers would attend the situation in Central Asia. But this was evidently a matter to be effected in the first place by negotiation, and not by violence and force of arms. Russia had always been a friendly and indeed a sympathetic neighbor. In this very matter of Ili she had originally acted with the most considerate attention for China's rights, when it seemed that they had permanently lost all definite meaning, for she had declared that she would surrender it on China sending a sufficient force to take possession, and now this had been done. It was, therefore, by diplomatic representations on the part of the Tsungli Yamen to the Russian Minister at Pekin that the recovery of Ili was expected in the first place to be achieved. At about the same time the Russian authorities at Tashkent came to the conclusion that the matter must rest with the Czar, and the Chinese official world perceived that they would have to depute a Minister Plenipotentiary to St. Petersburg.

The official selected for the difficult and, as it proved, dangerous task of negotiating at St. Petersburg, was that same Chung How who had been sent to Paris after the Tientsin massacre. He arrived at Pekin in August, 1878, and was received in several audiences by the empresses while waiting for his full instructions from the Tsungli Yamen. He did not leave until October, about a month after the Marquis Tseng, Tseng Kwofan's eldest son, set out from Pekin to take the place of Kwo Sungtao as Minister in London and Paris. Chung How reached St. Petersburg in the early part of the following year, and the discussion of the various points in question, protracted by the removal of the court to Livadia, occupied the whole of the summer months. At last it was announced that a treaty had been signed at Livadia, by which Russia surrendered the Kuldja valley, but retained that of the Tekes, which left in her hands the command of the passes through the Tian Shan range into Kashgar. Chung How knew nothing about frontiers or military precautions, but he thought a great deal about money. He fought the question of an indemnity with ability, and got it fixed at five million roubles, or little more than half that at which it was placed by the later treaty. There was never any reason to suppose that the Chinese government would accept the partial territorial concession obtained by Chung How. The first greeting that met Chung How on his return revealed the fate of his treaty. He had committed the indiscretion of returning without waiting for the Edict authorizing his return, and as the consequence he had to accept suspension from all his offices, while his treaty was submitted to the tender mercies of the grand secretaries, the six presidents of boards, the nine chief ministers of state, and the members of the Hanlin. Three weeks later, Prince Chun was specially ordered to join the Committee of Deliberation. On January 27 Chung How was formally cashiered and arrested, and handed over to the Board of Punishment for correction. The fate of the treaty itself was decided a fortnight later. Chung How was then declared to have "disobeyed his instructions and exceeded his powers." On March 3 an edict appeared, sentencing the unhappy envoy to "decapitation after incarceration." This sentence was not carried out, and the reprieve of the unlucky envoy was due to Queen Victoria's expression of a hope that the Chinese government would spare his life.

At the same time that the Chinese refused their ratification to Chung How's treaty, they expressed their desire for another pacific settlement, which would give them more complete satisfaction. The Marquis Tseng was accordingly instructed to take up the thread of negotiation, and to proceed to the Russian capital as Embassador and Minister Plenipotentiary. Some delay ensued, as it was held to be doubtful whether Russia would consent to the reopening of the question. But owing to the cautious and well-timed approaches of the Marquis Tseng, the St. Petersburg Foreign Office acquiesced in the recommencement of negotiations, and, after six months' discussion, accepted the principle of the almost unqualified territorial concession for which the Chinese had stood firm. On February 12, 1881, these views were embodied in a treaty, signed at St. Petersburg, and the ratification within six months showed how differently its provisions were regarded from those of its predecessor. With the Marquis Tseng's act of successful diplomacy the final result of the long war in Central Asia was achieved. The Chinese added Ili to Kashgar and the rest of the New Dominion, which at the end of 1880 was made into a High Commissionership and placed under the care of the dashing General Liu Kintang.