History of Macau

The region is first known to have been settled during the Han dynasty. Macau did not develop as a major settlement until the Portuguese arrived in the 16th century. The first European visitor to reach China by sea was the explorer Jorge Álvares, who arrived in 1513. Merchants first established a trading post in Hong Kong waters at Tamão (present-day Tuen Mun), beginning regular trade with nearby settlements in southern China. Military clashes between the Ming and Portuguese navies followed the expulsion of the Tamão traders in 1521. Despite the trade ban, Portuguese merchants continued to attempt settling on other parts of the Pearl River estuary, finally settling on Macau. Luso-Chinese trade relations were formally reestablished in 1554 and Portugal soon after acquired a permanent lease for Macau in 1557, agreeing to pay 500 taels of silver as annual land rent.

The initially small population of Portuguese merchants rapidly became a growing city. The Roman Catholic Diocese of Macau was created in 1576, and by 1583, the Senate had been established to handle municipal affairs for the growing settlement. Macau was at the peak of its prosperity as a major entrepôt during the late 16th century, providing a crucial connection in exporting Chinese silk to Japan during the Nanban trade period. Although the Portuguese were initially prohibited from fortifying Macau or stockpiling weapons, the Fortaleza do Monte was constructed in response to frequent Dutch naval incursions. The Dutch attempted to take the city in the 1622 Battle of Macau, but were repelled successfully by the Portuguese. Macau entered a period of decline in the 1640s following a series of catastrophic events for the burgeoning colony: Portuguese access to trade routes was irreparably severed when Japan halted trade in 1639, Portugal revolted against Spain in 1640, and Malacca fell to the Dutch in 1641.

Maritime trade with China was banned in 1644 following the Qing conquest under the Haijin policies and limited only to Macau on a lesser scale while the new dynasty focused on eliminating surviving Ming loyalists. While the Kangxi Emperor lifted the prohibition in 1684, China again restricted trade under the Canton System in 1757. Foreign ships were required to first stop at Macau before further proceeding to Canton. Qing authorities exercised a much greater role in governing the territory during this period; Chinese residents were subject to Qing courts and new construction had to be approved by the resident mandarin beginning in the 1740s. As the opium trade became more lucrative during the eighteenth century, Macau again became an important stopping point en route to China.

Following the First Opium War and establishment of Hong Kong, Macau lost its role as a major port. Firecracker and incense production, as well as tea and tobacco processing, were vital industries in the colony during this time. Portugal was able to capitalise on China’s post-war weakness and assert its sovereignty; the Governor of Macau began refusing to pay China annual land rent for the colony in the 1840s, and annexed Taipa and Coloane, in 1851 and 1864 respectively. Portugal also occupied nearby Lapa and Montanha, but these would be returned to China by 1887, when perpetual occupation rights over Macau were formalised in the Sino-Portuguese Treaty of Peking. This agreement also obligated Portugal from ceding Macau without Chinese approval. Despite occasional conflict between Cantonese authorities and the colonial government, Macau’s status remained unchanged through the republican revolutions of both Portugal in 1910 and China in 1911. The Kuomintang further affirmed Portuguese jurisdiction in Macau when the Treaty of Peking was renegotiated in 1928.

During the Second World War, the Empire of Japan did not occupy the colony and generally respected Portuguese neutrality in Macau. However, after Japanese troops captured a British cargo ship in Macau waters in 1943, Japan installed a group of government “advisors” as an alternative to military occupation. The territory largely avoided military action during the war except in 1945, when the United States ordered air raids on Macau after learning that the colonial government was preparing to sell aviation fuel to Japan. Portugal was later given over US$20 million in compensation for the damage in 1950.

Refugees from mainland China swelled the population as they fled from the Chinese Civil War. Access to a large workforce enabled Macau’s economy to grow as the colony expanded its clothing and textiles manufacturing industry, developed tourism, and legalised casino gaming. However, at the height of the Cultural Revolution, residents dissatisfied with the colonial administration rioted in the 1966 12-3 incident, in which 8 people were killed and over 200 were injured. Portugal lost full control over the colony afterwards, and agreed to cooperate with the communist authorities in exchange for continued administration of Macau.

Following the 1974 Carnation Revolution, Portugal formally relinquished Macau as an overseas province and acknowledged it as a “Chinese territory under Portuguese administration.” After China first concluded arrangements on Hong Kong’s future with the United Kingdom, it entered negotiations with Portugal over Macau in 1986. They were concluded with the signing of the 1987 Joint Declaration on the Question of Macau, in which Portugal agreed to transfer the colony in 1999 and China would guarantee Macau’s political and economic systems for 50 years after the transfer. In the waning years of colonial rule, Macau rapidly urbanised and constructed large-scale infrastructure projects, including Macau International Airport and a new container port. Macau was transferred to China on 20 December 1999, after 442 years of Portuguese rule.

Following the transfer, Macau liberalised its casino industry (previously operating under a government-licensed monopoly) to allow foreign investors, starting a new period of economic development. The regional economy grew by a double-digit annual growth rate from 2002 to 2014, making Macau one of the richest economies in the world on a per capita basis. Political debates have centred on the region’s jurisdictional independence and the central government’s adherence of “one country, two systems”. While issues such as national security legislation have been controversial, Macanese residents have generally high levels of trust in the government.

In 2015, the borders of Macau were redrawn by the state council, shifting the land border north to the Canal dos Patos and expanding the maritime border significantly. The changes increased the size of Macau’s maritime territory by 85 square kilometers.