In 1637, increasing suspicion of the intentions of Spanish and Portuguese Catholic missionaries in Japan finally led the shogun to seal Japan off from all foreign influence. Later named the sakoku period, this meant that no Japanese were allowed to leave the country (or return if they were living abroad), and no foreign ship was allowed to dock in a Japanese port. An exception was made for the Protestant Dutch, who were allowed to continue to trade with Japan from the confines of a small man-made island in Nagasaki,Deshima. Macau’s most profitable trade route, that between Japan and China, had been severed. The crisis was compounded two years later by the loss of Malacca to the Dutch in 1641, damaging the link with Goa.

The news that the Portuguese House of Braganza had regained control of the Crown from the Spanish Habsburgs took two years to reach Macau, arriving in 1642. A ten-week celebration ensued, and despite its new-found poverty, Macau sent gifts to the new King João IV along with expressions of loyalty. In return, the King rewarded Macau with the addition of the words “There is none more Loyal” to its existing title. Macau was now “City of the Name of God in China, There is none more loyal”. (“Não há outra mais Leal).

In 1685, the privileged position of the Portuguese in trade with China ended, following a decision by the emperor of China to allow trade with all foreign countries. Over the next century, England, Holland, France, Denmark, Sweden, the United States and Russia moved in, establishing factories and offices in Guangzhou and Macau. British trading dominance in the 1790s was unsuccessfully challenged by a combined French and Spanish naval squadron at the Macau Incident of 27 January 1799.

Until 20 April 1844 Macau was under the jurisdiction of Portugal’s Indian colonies, the so-called “Estado português da India” (Portuguese State of India), but after this date, it, along with East Timor, was accorded recognition by Lisbon (but not by Beijing) as an overseas province of Portugal. The Treaty of Peace, Amity, and Commerce between China and the United States was signed in a temple in Macau on 3 July 1844. The temple was used by a Chinese judicial administrator, who also oversaw matters concerning foreigners, and was located in the village of Mong Há. The Templo de Kun Iam was the site where, on 3 July 1844, the treaty of Wangxia (named after the village of Mong Ha where the temple was located) was signed by representatives of the United States and China. This marked the official beginning of Sino-US relations.

1844–1938: The Hong Kong effect

After China ceded Hong Kong to the British in 1842, Macau’s position as a major regional trading centre declined further still because larger ships were drawn to the deep water port of Victoria Harbour. In an attempt to reverse the decline, Portugal declared Macau a free port, expelled Chinese officials and soldiers, and thereafter levied taxes on Chinese residents. In 1848, there was a revolt of the boatmen that was put down.

Portugal continued to pay rent to China until 1849, when the Portuguese abolished the Chinese customs house and declared Macau’s “independence”, a year which also saw Chinese retaliation and finally the assassination of Gov. Ferreira do Amaral during the so-called Baishaling Incident. Portugal gained control of the island of Wanzai (Lapa by the Portuguese and now as Wanzaizhen), to the northwest of Macau and which now is under the jurisdiction of Zhuhai (Xiangzhou District), in 1849 but relinquished it in 1887. Control over Taipa (氹仔 in Chinese, Jyutping: Tam5 Zai2; pinyin: Dàngzǎi) and Coloane (路環 in Chinese, Jyutping: Lou6 Waan4; pinying: Lùhuán), two islands south of Macau, was obtained between 1851 and 1864. Macau and East Timor were again combined as an overseas province of Portugal under control of Goa in 1883. The Protocol Respecting the Relations Between the Two Countries (signed in Lisbon 26 March 1887) and the Beijing Treaty (signed in Beijing on 1 December 1887) confirmed “perpetual occupation and government” of Macau by Portugal (with Portugal’s promise “never to alienate Macau and dependencies without agreement with China” in the treaty). Taipa and Coloane were also ceded to Portugal, but the border with the mainland was not delimited. Ilha Verde (青洲 in Chinese, Jyutping: Ceng1 Zau1 or Cing1 Zau1; pinyin: Qīngzhōu) was incorporated into Macau’s territory in 1890, and, once a kilometre offshore, by 1923 it had been absorbed into peninsula Macau through land reclamation.

In 1871, the Hospital Kiang Wu was founded as a traditional Chinese medical hospital. It was in 1892 that doctor Sun Yat-Sen brought Western medicine services to the hospital.

1848–1870s: Slave trade[edit]

From 1848 to about the early 1870s, Macau was the infamous transit port of a trade of coolies (or slave labourers) from southern China. Most of them were kidnapped from the Guangdong province and were shipped off in packed vessels to Cuba, Peru, or other South American ports to work on plantations or in mines. Many died on the way there due to malnutrition, disease, or other mistreatment. TheDea del Mar which had set sail to Callao from Macau in 1865 with 550 Chinese on board, arrived in Tahiti with only 162 of them still alive.

1938–1949: World War II

Macau became a refugee center during WWII causing its population to climb from about 200 thousand to about 700 thousand people within a few years.^[28] There had been also food shortages in Macau leading to food rationing and in some cases cannibalism.^[28][29]

Unlike in the case of Portuguese Timor which was occupied by the Japanese in 1942 along with Dutch Timor, the Japanese respected Portuguese neutrality in Macau, but only up to a point. As such, Macau enjoyed a brief period of economic prosperity as the only neutral port in South China, after the Japanese had occupied Guangzhou (Canton) and Hong Kong. In August 1943, Japanese troops seized the British steamer Sian in Macau and killed about 20 guards. The next month they demanded the installation of Japanese “advisors” under the alternative of military occupation. The result was that a virtual Japanese protectorate was created over Macau. Japanese domination ended in August 1945.

When it was discovered that neutral Macau was planning to sell aviation fuel to Japan, aircraft from the USS Enterprise bombed and strafed the hangar of the Naval Aviation Centre on 16 January 1945 to destroy the fuel. American air raids on targets in Macau were also made on 25 February and 11 June 1945. Following Portuguese government protest, in 1950 the United States paid US$20,255,952 to the government of Portugal.

1949–1999: Macau and communist China

When the Chinese communists came to power in 1949, they declared the Protocol of Lisbon to be invalid as an “unequal treaty” imposed by foreigners on China. However, Beijing was not ready to settle the treaty question, leaving the maintenance of “the status quo” until a more appropriate time. Beijing took a similar position on treaties relating to the Hong Kong territories of the United Kingdom.

In 1951, the Salazar regime declared Macau, as well as other Portuguese colonies, an “Overseas Province” of Portugal.

During the 1950s and 1960s Macao’s border crossing to China Portas do Cerco was also referred to as Far Eastern Checkpoint Charlie with a major border incident happening in 1952 with Portuguese African Troops exchanging fire with Chinese Communist border guards. According to reports, the exchange lasted for 1-and-three-quarter hours leaving one dead and several dozens injured on Macau side and more than 100 casualties claimed on the Communist Chinese side.

In 1954, the Macau Grand Prix was established, first as a treasure hunt throughout the city and in later years as formal car racing event.

In 1962, the gambling industry of Macau saw a major breakthrough when the government granted the Sociedade de Turismo e Diversões de Macau (STDM), a syndicate jointly formed by Hong Kong and Macau businessmen, the monopoly rights to all forms of gambling. The STDM introduced western-style games and modernised the marine transport between Macau and Hong Kong, bringing millions of gamblers from Hong Kong every year.

Riots broke out in 1966 during communist Cultural Revolution, when local Chinese and the Macau authority clashed, the most serious one being the so-called 12-3 incident. It was sparked by the overreaction of some Portuguese officials to what was a regular minor dispute concerning building permits. The riots caused 8 deaths and the end was a total climbdown by the Portuguese Government, which signed two agreements, one with Macau’s Chinese community, and the other with mainland China. The latter committed the Government to compensate local Chinese community leaders with as much as 2 million Macau Patacas and to prohibit all Kuomintang activities in Macau. This move ended the conflict, and relations between the government and the leftist organisations remained largely peaceful. This success in Macau encouraged leftists in Hong Kong to “do the same”, leading to riots by leftists in Hong Kong in 1967. A Portuguese proposal to return the province to China was declined by China.

Also in 1966, the Church of our Lady of Sorrows on Coloane opened up.

In 1968, the Taipa-Coloane Causeway linking Taipa island and Coloane island was opened up.

In 1974, following the anti-colonialist Carnation Revolution, Portugal relinquished all claims over Macau and proposed to return Macau over to Chinese sovereignty.

In 1990, the Academy of Public Security Forces was founded in Coloane.

In 1994, the Bridge of Friendship was completed, the second bridge connecting Macau and Taipa.

In November 1995, the Macau International Airport got inaugurated. Before then the territory only had 2 temporary airports for small aeroplanes, in addition to several permanent heliports.

In 1997, the Macau Stadium was completed in Taipa.

1999: Handover to the People’s Republic of China

Portugal and the People’s Republic of China established diplomatic relations on 8 February 1979, and Beijing acknowledged Macau as “Chinese territory under Portuguese administration.” A year later, Gen. Melo Egidio became the first governor of Macau to pay an official visit to Beijing.

The visit underscored both parties’ interest in finding a mutually agreeable solution to Macau’s status. A joint communiqué signed 20 May 1986 called for negotiations on the Macau question, and four rounds of talks followed between 30 June 1986 and 26 March 1987. The Joint Declaration on the Question of Macau was signed in Beijing on 13 April 1987, setting the stage for the return of Macau to full Chinese sovereignty as a Special Administrative Region on 20 December 1999.

After four rounds of talks, “the Joint Declaration of the Government of the People’s Republic of China and the Government of the Republic of Portugal on the Question of Macau” was officially signed in April 1987. The two sides exchanged instruments of ratification on 15 January 1988 and the Joint Declaration entered into force. During the transitional period between the date of the entry into force of the Joint Declaration and 19 December 1999 the Portuguese government was responsible for the administration of Macau.

The Basic Law of the Macau Special Administrative Region of the People’s Republic of China, was adopted by the National People’s Congress (NPC) on 31 March 1993 as the constitutional law for Macau, taking effect on 20 December 1999.

The PRC has promised that, under its “one country, two systems” formula, China’s socialist economic system will not be practised in Macau and that Macau will enjoy a high degree of autonomy in all matters except foreign and defence affairs until at least 2049, fifty years after the handover.

Thus the history of European colonisation of Asia ended where it began. Although offered control of Macau in the 1970s, the Chinese deemed the time “not yet ripe” and preferred to wait until December 1999—the very end of the millennium, two years after the Hong Kong handover—to close this chapter of history.