The History of Macau

Macau is one of the most remarkable countries in the world. But you might not have ever even heard of it.

The GDP per capita of Macau is higher than the GDP per capita of any other country in the world. This makes Macau the richest country on the planet. But the residents of the country aren’t just wealthier than people elsewhere. They’re also healthier. In fact, they live longer than almost any other population in the world.

Those aren’t the only records Macau breaks. It’s a relatively small land mass with a high population. In fact, it’s the most densely populated country on the planet. They also have the world’s lowest birth rate. 25% of the people working in Macau are immigrants from China.

And it’s the only Asian country where the official language is… Portuguese?

There’s a story behind that, too, which we’ll get into later in this history of the country.

Macau is a tiny peninsula dotted with islands. Technically, it’s a “special administrative region” of China. It used to be a major player in colonial trade. But now it’s the world’s top gambling destination. And the official language is Portuguese because it used to be a colony of Portugal. It’s so close to mainland China that you can practically see Hong Kong from your hotel window.

How did Macau go from an unsettled peninsula in the 15th century to the world’s premier gambling destination?

Macau's Origins

It’s probably best to start with a basic geography lesion. The Macau Peninsula is the tip of a larger peninsula with 2 major Chinese rivers on either side.

Macau shares a border with mainland China, but that border is only 2 city blocks long. Most of the country’s border is the 25 miles of coastal border.

It is only 40 miles west of Hong Kong, and it includes the islands of Taipa and Colaoane.

According to anthropologists, the area has been settled for over 7000 years. The area was unclaimed by any government until the Qin Dynasty. They made the area part of Guangdong Province 1800 years ago. Ownership of the area was fluid for over 1200 years.

In 1277, the Mongols invaded China, and 10s of thousands of Chinese went into hiding on Taipa and Coloane. They defended their settlements and eventually expanded their occupation to include the peninsula itself. Some of the Chinese stayed behind and established the first permanent settlement.

100 years later, fishermen joined these settlers. They were eager to use the easily-accessible islands for shelter. Eventually a merchant and priest class arose. Historians and anthropologists have found Buddhist and other folk relics from the year 1300.

Macau was then known as Haojing, or “mirror sea”. It was a perfect spot to establish trade with Southeast Asia.

The Portuguese Occupation

In 1513, Jorge Alvarez was an explorer with a mission to discover trade routes and riches in the name of Portugal. At the time, Portugal was the world leader in sailing, navigation, and cartography technology. Alvarez and his crew became the first Europeans to reach this part of the world by sail.

What they found was deserted—at least of permanent life. If they’d landed a little to the east or to the west, they’d have found a community of people who’d been living there for centuries. Instead, they claimed the peninsula and its neighboring islands in the name of Portugal. It became a permanent settlement.

Eventually, the Portuguese encountered the Chinese, who were (of course) not thrilled that these strange foreigners with their strange language were claiming such a large portion of their land. Alvarez and his men fought a brief war with Imperial Chinese troops. This land was obviously considered valuable.

China and Portugal reached an agreement. The Portuguese were allowed to stay but only to make port in the waters near the peninsula. They were not allowed to build permanent shelters or settlements. Diplomacy eventually won out, though, and in 1553, the Portuguese were granted permission to build and settle permanently.

The Portuguese government had figured out how much money they could make with this new trading position. Buying the rights to settle for just 40 pounds of silver a year made economic sense. They paid annual rent for over 300 years in order to maintain their settlements.

This was a classic win-win situation. By 1633, the Chinese had restricted all trade in this part of China to the Portuguese and themselves. For Portugal, it was like having the exclusive right to deal with Southern China.

Troubled Times Ahead

By the early 17th century, Macau had become an Asian port city unlike any other. The language, food, customs, and religion were blends of Southern European and South Asian traditions. A new dialect of Portuguese and a new variation of Chinese were both spoken in the streets.

But there were problems.

At least 10% of the people in Macau were servants. Many were slaves. That’s not a social setup that encourages tranquility.

In fact, the area had one of the same problems that’s starting to plague the United States in the 21st century. Income disparity.

The Dutch and the Portuguese had been involved in a cold war for some time. In the early 17th century, the Dutch sent 500 trained soldiers to take Macau in the name of Holland. Immigrants and slaves defended the settlement from the invading Dutch.

This forced Portugal and China to address Macau’s autonomy as a country. But it took over 200 years and plenty more strife before the 2 countries came to any kind of actual agreement.

China and Portugal: Making Friends

During the First Opium War, the Portuguese were able to fully occupy the islands of Taipa and Coloane. By 1887, the Chinese government was so weakened by their war with Great Britain, they gave Portugal sovereignty over Macau.

Strangely, what brought the 2 countries together was a worldwide demand for opium. China gave Portugal complete control over Macau with the following understanding.

They were also required to work with China to create profitable taxation systems. China needed to get some money back into its coffers.

It was then business as usual for another 50 years. Portugal had almost total control of trade in the area. And they were constantly working with China to secure profitable trading deals for both countries.

After the Pacific War ended, Macau became even more important. This was related to its status as a neutral port during World War II. Not only was Macau a safe haven for refugees of the Chinese Civil War, it was also becoming a major player in the world trade scene. After the Chinese Cultural Revolution, the Chinese government wanted to reconsider the deal with Portugal. Riots broke out in 1955. The Portuguese government used violence to quell the political upheaval.

There was calm. But it was uneasy.

The Carnation Revolution

That uneasy calm became a sense of urgency in 1974. It was time for the Portuguese occupation to end. The Carnation Revolution was an anti-colonialist movement, and a military coup ousted the Estado Novo dictatorship.

Almost no shots were fired.

But the effects were massive.

Both Macau and East Timor were released from Portuguese rule. In 1976, the Portuguese government in Lisbon redefined Macau as a “Chinese territory under Portuguese administration.”

Essentially, the Carnation Revolution resulted in a reversal of the rental agreement that had been in place for over 300 years.

What did this mean?

It meant that Macau was now a territory with a lot of personal control. Citizens now had control of all administrative, economic, and political aspects of their lives. By 1980, Portugal and China had made another agreement. This one changed one word of their former agreement.

Macau was now “a Chinese territory under temporary Portugues administration.”

This one word, “temporary”, became a step toward Macau’s independence.

Finally, in December of 1999, Portugal and China both got out of the way and granted Macau status as an independent territory.

• Macau is now responsible for its own:
• Political parties
• Legislature
• Constitution ("Macau Basic Law")
• Legal system
• Police force
• Financial system
• Postal service
• Educational system

Macau's Casino Age

None of this answers the question of how Macau became a gambling Mecca to the entire world. In 2002, the new Macau government ended the state monopoly on gambling. They granted 6 casino licenses, including one to each of the following.

• Wynn Resorts
• Las Vegas Sands
• Galaxy Entertainment Group
• MGM Mirage

Macau became the gambling hub of Southeast Asia almost overnight.

The development of the Cotai strip has been instrumental in the establishment of Macau as a major gambling center. This development was part of the push away from state-run gambling. The idea was to imitate the Vegas Strip—only bigger.

By 2007, resorts started popping up on the Cotai strip, the first of which was the Venetian Macao. Billions of dollars have been spent developing this thin part of the peninsula into a gambling hotspot.

This new stream of tax revenue encouraged Macau to grant more gambling licenses. Unemployment in the area dropped to less than 1%. The local tourist economy exploded. In 2007, Macau forecasted a need for new housing in the area. This construction continues even now that over 10,000 apartment units have been built for the employees of the new tourist industry.

Looking Forward to the Future of Macau

2007 and 2008 were tough years for Macau because of the global recession. Billions continued to pour into development though.

Global trade is still sluggish, which is bad for tourism. Macau is also now the worst case of income disparity in the world. The massive poverty class there supports the large wealthy class. Homelessness and unemployment are becoming problems, too.

Immigrants are being hired to do some of the work that locals used to do. So now there’s a furor over immigration in the country.

The country also faces controversy regarding the official language. Chinese-speaking Macau citizens want Portuguese removed as the official language.

The recession there is expected to last until the end of 2015, but casino revenue is already up in 2015. Since 2014 was the first year to show a drop in casino revenue, this is particularly good news for the area. Not only does it represent the beginnings of an economic recovery, it also provides the country with some much-needed optimism about the future.

Tourism is up. Job growth is up. There’s light at the end of the recent economic tunnel. As the global gaming industry grows, so does Macau.