He was stuck behind Ferrari team-mate Kimi Raikkonen for the opening phase of the grand prix before he made his move on lap 20.
Although it is still early days in the title race, this year looks set to offer fans a Hamilton versus Vettel battle for race wins, and ultimately the World title.
Lance Stroll, the 18-year-old rookie, spun off the track on the first lap after making contact with Force India's Sergio Perez. The Williams ended up in the gravel and the virtual safety auto was deployed.
Mercedes driver Lewis Hamilton stormed to pole position for Sunday's Chinese Grand Prix after clocking the fastest ever lap of the Shanghai circuit in the dying seconds of a hard-fought qualifying session on Saturday. He was fine but the real safety vehicle was called.
Hamilton and Mercedes bounced back from their loss in Australia, while Vettel and Ferrari proved their pace in Melbourne was no fluke.
Hamilton crossed the line 6.2 seconds ahead of Vettel, the victor of last month's season-opening race in Australia, to claim his fifth win in Shanghai.
Having been only two seconds behind Ricciardo before the Australian pitted, Raikkonen emerged from his stop with a deficit of just over 14 seconds, and believes that Ferrari should have brought him much earlier.
He slipped back after a disappointing start, but passed Ricciardo after the pair went wheel to wheel and overtook Verstappen following an error from the youngster on lap 24.
By now though Hamilton was almost 12 seconds up the road.
Ricciardo took fourth behind Verstappen after a furious late scrap between the two Red Bulls with Raikkonen finishing in fifth ahead of fellow Finn Valtteri Bottas' Mercedes. His team-mate Stoffel Vandoorne also failed to make it to the end after suffering a mechanical failure to cap another miserable weekend for McLaren.
Romain Grosjean was just outside the points in the other Haas vehicle, ahead of Renault duo Nico Hulkenberg and Jolyon Palmer, Williams' Felipe Massa and Sauber's Marcus Ericsson in positions 12 through to 15.
Mercedes' Lewis Hamilton says he's relishing the chance to compete for the 2017 championship against Ferrari and Sebastian Vettel. "He was closing the gap a little bit but I managed to stay ahead". "If we can be close, that's good".
The triple world champion and the teenaged Red Bull driver engaged in some light-hearted banter on the podium, withHamilton, while summing up the race, hesitating mid-sentence and seemingly forgetting Verstappen's name before calling him "this young guy here".
"He's really maximised above and beyond in those, which is why he gets driver of the day". "I've been in the sport long enough and it's not very often that it's all smiling and happy".
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