History · Macau

Macau: The First and Last Colony

The oldest European settlement in East Asia — a Portuguese trading post from 1557, a decaying backwater in Hong Kong's shadow, the last colonial territory returned to China, and now the largest gambling centre on Earth

By Worldlore Editorial · 10 September 2026

An ornate stone church facade standing alone at the top of a grand staircase, with nothing behind it
The Ruins of St Paul's — the surviving facade of a Jesuit church built around 1600 and destroyed by fire in 1835. It is Macau's emblem. (Joybot / Wikimedia Commons · CC BY-SA 2.0)

A tiny territory with a long record

Macau sits on the western side of the Pearl River estuary, about 60 kilometres from Hong Kong — around 33 square kilometres, much of it reclaimed from the sea, with some 690,000 people, making it the most densely populated territory on the planet. It was the first permanent European settlement in East Asia and the last colonial possession handed back, in 1999. And it is now the world's largest gambling centre, earning several times the gaming revenue of Las Vegas.

A short history

  1. c. 1557

    The Portuguese post

    Traders are allowed a permanent base on the peninsula.

  2. 1580s–1630s

    The golden age

    Macau is the hub of the Japan–China–Europe silk-and-silver trade.

  3. 1639

    Decline begins

    Japan closes itself; the trade collapses.

  4. 1849

    Full control

    Portugal stops paying rent and asserts sovereignty.

  5. 1887

    Treaty of Peking

    China recognises Portuguese rule.

  6. 1966–1967

    The 12-3 incident

    Riots leave the pro-Beijing side in real control.

  7. 1987

    Joint Declaration

    Macau to return to China in 1999.

  8. 1999

    Handover

    The last European colony in Asia is returned.

  9. 2002 onward

    The casino boom

    Macau overtakes Las Vegas.

The trading post

Portuguese traders, already established at Malacca and active along the China coast, were permitted from around 1557 to set up a permanent base on the Macau peninsula — by arrangement with local Ming officials, with a "ground rent" paid from 1573, rather than by conquest.

An 1844 photograph of the tiered pavilions of the A-Ma Temple against a rocky hillside
The A-Ma Temple, photographed in 1844 — one of the earliest photographs taken in China. The name 'Macau' derives from A-Ma-Gau, the bay of the sea goddess A-Ma. (Jules Itier / Wikimedia Commons)

For roughly eighty years Macau was the essential entrepôt of the early modern Asian trade — the hub of the route carrying Chinese silk to Japan for silver, and both on to Goa and Lisbon — and the gateway for Jesuit missionaries into China. Its golden age faded after Japan closed itself in 1639, and the Dutch and then the British took over the China trade.

Decline in Hong Kong's shadow

Portugal declared Macau a free port in 1845 and, exploiting China's weakness after the Opium Wars, stopped paying rent and claimed full sovereignty; the 1887 Treaty of Peking had China acknowledge Portuguese rule.

A 19th-century view of Macau's Praia Grande waterfront lined with colonial buildings and churches
The Praia Grande in the 19th century. Overshadowed by booming Hong Kong, Macau survived on gold trading, fishing, firecrackers, the coolie labour trade, and — legalised in 1847 — gambling. (Wikimedia Commons)

Because Portugal was neutral, Macau — unlike Hong Kong — was not occupied by Japan in the Second World War, and its population swelled with refugees. The decisive political shift came in 1966–67: a local dispute escalated into pro-Beijing riots during the Cultural Revolution, Portuguese police killed several people, and Portugal's government capitulated. From then on, Macau's pro-Beijing establishment held the real power, and after Portugal's 1974 revolution Macau was redefined as "Chinese territory under Portuguese administration".

Handover, and the casino boom

The Sino-Portuguese Joint Declaration of 1987 set Macau's return to China for 20 December 1999, as a Special Administrative Region under "one country, two systems" for 50 years. The handover ended the era of European colonies in Asia that Macau itself had opened 442 years earlier.

A dense cluster of enormous casino-resort towers on the reclaimed Cotai strip at dusk
The Cotai strip, built on reclaimed land after Macau opened its gambling market to competition in 2002. Macau overtook Las Vegas in gaming revenue by 2006. (Meraj Chhaya / Wikimedia Commons)

In 2002 Macau ended the decades-long casino monopoly of the tycoon Stanley Ho and let Las Vegas operators in. Gaming revenue exploded, driven by mainland Chinese high-rollers, and Macau became one of the richest places in the world per head — wealthy enough to pay every resident an annual cash handout. The 2020–22 pandemic border closures, which shut off visitors, exposed how completely the economy depends on gambling and on the mainland.

Macau now

Politically, Macau has been consistently compliant. It passed its own national-security law in 2009 without controversy, and since Hong Kong's 2019 protests it has tightened further — barring "unpatriotic" candidates and disqualifying pro-democracy legislators. Beijing presents Macau as the model of how "one country, two systems" is meant to work. Efforts to diversify the economy beyond the casinos have so far made little headway.

What Macau carries

Macau's whole history is one of accommodation. The Portuguese held it for four and a half centuries not by force but by permission, on the sufferance of Chinese authorities who could have ended the arrangement at any time. That habit — prospering by not causing trouble for a much larger power next door — carried straight through the 1999 handover into the SAR that exists today.

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