At a midnight ceremony, Portuguese and Chinese officials lowered the Portuguese flag and raised China's, transferring the tiny peninsula under a 'one country, two systems' framework similar to Hong Kong's 1997 handover. Macau became a Special Administrative Region, preserving its own currency, laws, and government for at least fifty years.
Macau's odd colonial history stretched back to 1557, when Portuguese traders established a settlement that became Europe's first and last foothold in China, outlasting even the British lease of Hong Kong by over two years. By the late twentieth century it had become a curious backwater known mainly for casinos, a status that would soon transform it into the world's largest gambling market by revenue.
Unlike Hong Kong's tense and closely scrutinized handover, Macau's transition drew comparatively little global attention, in part because Portugal had signaled its willingness to leave decades earlier and the territory's population was smaller and its economic stakes lower. The 1987 Joint Declaration between Lisbon and Beijing had already set the terms years in advance.
Chinese President Jiang Zemin presided over the ceremony, framing it as the final closing of the colonial chapter in Chinese history, following Hong Kong's return in 1997. Macau's transformation into a gambling juggalent—its casino revenues would eventually surpass those of Las Vegas several times over—came fast, aided by loosened licensing rules that opened the market to international operators within a few years of the handover.
Key people: Jiang Zemin, Jorge Sampaio