Portuguese colonial territory in south China. Portugal's last colony, in effect, and by agreement turned over to the People's Republic of China in 1999. Since Portuguese traders first settled in Macau in 1557, this tiny territory of 11 square kilometers (7 square miles) has been a Portuguese colony headed by a Portuguese administration. Long a dependency of the Viceroyalty of Goa, Portuguese India, Macau's prosperity depended on the vicissitudes of diplomatic and trade relations between China and the West. For nearly three centuries (ca. 1557-1842), Macau was the only Western entrepót-outpost-enclave-colony on the China coast. Even after Japan expelled Western traders in the 17th century, Macau had a key role as the link between China and the West. This role changed after Great Britain seized neighboring Hong Kong (1842) as a colony. Thereafter, Macau fell into the shadow of a booming Hong Kong.
   While it was a remote dependency of Portugal in the Far East, Macau has long played a multiplicity of roles: China's window on the West, preempted in the 1840s by Hong Kong; sanctuary and refuge for various waves of refugees from China or Hong Kong; because of its peculiar international status and location, a center of vice (gambling, smuggling, prostitution, and drug traffic); and a meeting place and exchange point for the Chinese and Portuguese civilizations.
   Following the Revolution of 25 April 1974, Lisbon offered to return Macau to mainland China, but the offer was refused, and negotiations between China and Portugal ensued. In the 1980s, China and Portugal negotiated a settlement whereby Portuguese sovereignty would continue until December 1999; "a Chinese territory under Portuguese administration" was the formula's general description. Chinese businessmen controlled Macau's economy, including its lucrative gambling and tourist industries, while Portugal provided nominal law and order. The settlement included a pledge by China that protection for the use of Portuguese language and the maintenance of democratic liberties would be continued for at least 50 years. In late December 1999, the last Portuguese governor-general hauled down the flag of Portugal, and the People's Republic of China assumed sovereignty over Macau. In effect, Portugal's formal overseas empire ceased with this historic change. During colonial times, Macau was known for its gambling casinos. Since its return to China, gambling has become its biggest industry and, in 2006, Macau overtook Las Vegas in gaming revenue.

Historical dictionary of Portugal 3rd ed.. . 2014.

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