A rickshaw driver carries passengers through downtown Macau street

MACAU, China -- European colonialism began in East Asia and China in the early 16th Century with the arrival of the first Portuguese in the vicinity of Guangzhou on the southeast coast of China and the subsequent formal establishment in 1557 of a Portuguese presence in Macau, a small peninsula on the western flank of the Pearl River estuary.

On December 20, 1999, European colonialism came to a formal end in Macau and Asia as well, concluding almost half a millennium of colonial presence and activity.

Macau was formally returned to Chinese control according to the tenets of the 1987 Joint Declaration, a document modeled on the recently completed Hong Kong handover between Britain and China under which Hong Kong returned to China in 1997 as a Special Administrative Region (SAR).

	AUDIO
Stanley Ho, who owns Macau's gambling franchise, says the government should not issue more licenses because inexperienced participants could reduce government revenue 1.5MB/37 sec. AIFF or WAV sound
Edmund Ho, the chief executive of the Macau Special Administrative Region, promises to crack down on crime 119K/37 sec. AIFF or WAV sound

That Macau is being awarded a similar SAR status for 50 years is also a symbol and signal to Taiwan, another so far unredeemed territory of Greater China. What does this event mean for China, and what does it portend for Macau? To seek the answer, it is useful to consider briefly the role of Macau in Chinese history.

The territory of Macau served first as a trading outpost for the Portuguese, and later other European states that wished to trade with China, a kind of modified extension of the Chinese tributary system whereby the Chinese entered into trading and quasi-diplomatic relations with their Asian neighbors who were allowed to trade with China if they were willing to acknowledge the primacy of the Chinese state.

The Portuguese and other Europeans eager for the profitable trade in high quality silks, ceramics, and other products thus were given a modified status to allow them to engage in a very limited way with China through Macau.

Residents of Macau pass by a statue built as a symbol of Portuguese and Chinese friendship and cooperation at the bottom of the steps leading to Macau's ruins of St. Paul

Trade was first through Macau and Guangzhou, and later Jesuit priests followed who sought to save souls for Christ.

Limited in their early exposure and access to China, both priests and traders used Macau as a way station for entry into Japan in the late 16th century. Prosperity waxed and waned during the 17th and 18th centuries as Macau was the main trading post and window on China for Europe.

It was one of the few places in East Asia where Europeans traders had even the scantiest toehold.

In 1839, the British engaged China in the Opium War, and there quickly followed the establishment of the British colony of Hong Kong with its deep harbor, better point of entry, and rapidly growing shipping and trading economy.

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Macau's preeminence was lost to Hong Kong, and a period of relative decline and stagnation followed. Yet the role of Macau as Portugal's beachhead to China and East Asia was never lost and has continued until December, 1999.

China has watched Macau and has used it for both real and symbolic purposes, as China has emerged from several centuries of instability, civil war, and economic stagnation to assume its role as growing economic and national power and the dominant state in East Asia.

The role of Macau was to serve early as a buffer between China and the West, a small and somewhat tenuous link to the larger world.

As China learned more about the outside world, this role expanded and yet was later eclipsed by other colonies and treaty ports, but its symbolic value persisted.

Its economy could no longer depend on shipping and commerce, so the territory shifted to gambling, gold smuggling, and tourism in the second half of the 20th century. Chinese dominated these areas of Macau's economy, and thus China allowed Macau to persist even during China's Cultural Revolution of the late 1960s when Portugal was eager to return Macau to China.

As the 20th century ends, China brings to a close the last vestiges of colonial rule on its national territory and Macau returns. The transition and runup to the return have been relatively smooth in stark contrast to the British-Chinese squabbling over Hong Kong's return, and so the Portuguese retreat with some pride intact.

Yet there has been local criticism over the annual construction of Portuguese monuments intended to symbolize the peaceful and benign nature of their colonial rule.

Gambling is one of Macau's main sources of revenue

And the Portuguese have been incapable of controlling the violent crime associated with Triad gangs seeking to assert control over the gambling, prostitution, and other illicit activities that have expanded in recent years.

Many local inhabitants seem relieved at the turnover and look forward to China's more firm hand that they hope will not tolerate such open violence and chaos and will lead toward a restoration of prosperity as more tourists return to the casinos and other local sites.

At the same time Chinese control may allow a more flexible approach to trade and economic development for the Macau SAR to reestablish some of its former role as an important entrepot and entry point for global trade and commerce.

It is this role predicated on the recent massive investments in improved transportation linkages such as the new airport and proposed highway and rail links to Guangdong that will facilitate Macau's competition with Hong Kong and its role for the next half century and beyond after its return to the motherland.