Macao

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Macao

Macao (also Macau), a special administrative region of the People's Republic of China, occupies a small, hilly peninsula located on the west shore of the Pearl River (or Zhujiang River) on the southeast coast of China. Originally less than 15 square kilometers (5.8 square miles), the peninsula and the adjacent islands of Taipa and Colôane have expanded by land reclamation since the early twentieth century to 27 square kilometers (10.4 square miles). The population in 2004 was approximately 460,000, 95 percent comprising Chinese immigrants from the South China provinces, plus a small number of perhaps no more than 5,000 Macanese, the mixed-blood descendants of early Portuguese unions with Asian peoples.

Macao was founded in 1557 by Portuguese traders seeking a location for a permanent commercial settlement. Until the founding of Hong Kong nearly 300 years later, Macao was the only permanent European settlement in China. By 1600 Macao had become a thriving cosmopolitan city, its prosperity founded on the trade network from Goa in India, to Malacca on the Malay Peninsula, to Macao, and on to Nagasaki in southern Japan.

By the mid-seventeenth century the Portuguese seaborne empire declined precipitously under the assault of the Dutch, who took Malacca in 1641. In 1640 Japan expelled all foreigners and closed the country. Macao's prosperity collapsed, and the city survived as a center of local Southeast Asian trade. As the new colonial powers, led by Britain, arrived in pursuit of the China trade in the late eighteenth century, Macao's importance was revived as a temporary refuge for Europeans involved in the Canton (Guangzhou) trade. But when Hong Kong was founded by the British in 1842 in the wake of the first Opium War (1839–1842), Macao was relegated to a backwater, its inferior harbor increasingly unable to accommodate modern ships. By the early twentieth century Macao had acquired notoriety for gambling and various forms of vice. Its principal industries then included matches, fireworks, incense, furniture, and cheap toys. After World War II (1939–1945) Macao's economy remained stagnant, but the establishment of a gambling syndicate and the growth of tourism in the 1960s saw its slow revival.

China had never ceded sovereignty over the territory, and the Portuguese paid ground rent for the privilege of occupation. In the late nineteenth century Portugal attempted to claim formal sovereignty over Macao and a treaty in 1887 recognized Macao as a colony under perpetual Portuguese occupation. Its status remained ambiguous until the 1980s when Hong Kong's ultimate return to China in 1997 was settled with Britain. Negotiations between China and Portugal led to the return of Macao to Chinese control on December 20, 1999. The agreement preserved Macao's economy, society, culture, and quasi-autonomous government for at least fifty years.

From the 1980s Macao experienced rapid economic growth and expansion. Tourism and gambling grew vigorously with the construction of an airport, new hotels, and casinos. Fifty-five percent of municipal revenues derive from a tax on gambling. In 2002 the gambling monopoly was opened to bidding and new Las Vegas syndicates won places in Macao. Macao's robust economy has become an integral part of the Pearl River Delta economic region.