The German, whose exemplary lap of 1:31.095 was a new track record, was 0.530sec faster than Bottas in qualifying and 0.568sec quicker than Hamilton, who has won an unprecedented five times previously in Shanghai and arrived in town as the favourite.
"With the other tyre choice we were also in good shape, but of course here quite often the safety vehicle comes out and we reacted at the same time", he said. "Thank you guys, great qualifying, great auto", said Vettel, who also started the last race in Bahrain from pole, over the team radio.
The German's flying lap ensured back-to-back front row lockouts for Ferrari for the first time in 12 years despite Vettel admitting to being a bit wobbly on some turns in cold qualifying conditions.
"I think he realized he was wrong", said Vettel. "It was really good", Vettel said.
Hamilton was half second off Vettel's pace, and admitted he couldn't explain the gap.
"Obviously we're both lucky, but that's how it goes".
The incident robbed Red Bull the chance of a one-two finish, with Daniel Ricciardo's sublime charge through the field showing just how much pace the team had in pace over its rivals in the closing stages. "It is disappointing, we gave it everything we had and it kind of feel we deserved the win today but we didn't get it today".
Vettel dropped down to sixth after being spun round during the incident and finished the race in eighth having been overtaken by Nico Hulkenberg and Fernando Alonso late on.
The Italian glamour team last won in China in 2013.
"That would not be the right mindset", he said. The start will be an opportunity, and the strategy, too, but the auto felt like night and day.
"The amusing thing about being outperformed on Saturday is that you are the lion that is just waiting to jump on its prey", he added.
On softer and fresher tyres after Red Bull made a strategic call to pit both its cars during the safety auto period, Verstappen was closing in on Vettel for the final podium place.
Mechanics were seen frantically snapping major pieces of the car's body back into place as the clock ticked down, and the Australian driver tore out onto the track with only about a minute to spare. "I don't think I necessarily need to be less aggressive or anything because it has nothing to do with being overly aggressive. That will be fun". I didn't want to compromise my race with the guys behind.
"He came to me afterwards and apologised and I told him: 'Look, you threw a podium away yourself.' Don't forget it is split-second decisions but I think he has been around long enough".
The second Renault of Carlos Sainz was ninth, with Kevin Magnussen completing the points scoring places in 10th place for Haas.
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