Sixty kilometres west across the Pearl River Delta from Hong Kong lies the former Portuguese enclave of MACAU. Occupying a peninsula and a couple of islands of just thirty square kilometres in extent, Macau’s unique atmosphere has been unmistakably shaped by a colonial past – predating Hong Kong’s by nearly three hundred years – which has left old fortresses, Baroque churches, faded mansions, public squares, unusual food and Portuguese place names in its wake. But what draws in millions of big-spending tourists from Hong Kong, the mainland and neighbouring countries are Macau’s casinos, the only place in China where they have been legalized. The income they generate – over five billion US dollars annually – now exceeds that of Las Vegas, and has funded a construction boom for themed resorts, roads and large-scale land reclamation.

Considering that costs are somewhat lower here than in Hong Kong, and the ease of travel between Shenzhen, Hong Kong and Macau, it’s a great pity not to drop in on Macau if you are in the region. A day-trip from Hong Kong is possible (tens of thousands do it every weekend), though you really need a couple of nights to do the place justice.

Some history

For more than a thousand years, all trade between China and the West had been indirectly carried out overland along the Silk Road through Central Asia. But from the fifteenth century onwards, seafaring European nations started making exploratory voyages around the globe, establishing garrisoned ports along the way and so creating new maritime trade routes over which they had direct control.

In 1557 – having already gained toeholds in India (Goa) and the Malay Peninsula (Malacca) – the Portuguese persuaded Chinese officials to rent them a strategically well-placed peninsula at the mouth of the Pearl River Delta, known as Macao (or “Aomen” in Mandarin). With their important trade links with Japan, as well as with India and Malaya, the Portuguese found themselves in the profitable position of being sole agents for merchants across a whole swath of East Asia. Given that the Chinese were forbidden from going abroad to trade themselves, and that other foreigners were not permitted to enter Chinese ports, their trade blossomed and Macau grew immensely wealthy. With the traders came Christianity, and among the luxurious homes and churches built during Macau’s brief half-century of prosperity was the basilica of São Paulo, whose facade can still be seen today.

By the beginning of the seventeenth century, however, Macau’s fortunes were waning alongside Portugal’s decline as a maritime power. There was a brief respite when Macau became a base for European traders attempting to prise open the locked door of China during the eighteenth century, but following the British seizure of Hong Kong in 1841, Macau’s status as a backwater was sealed. Despite the introduction of licensed gambling in 1847, as a means of securing some kind of income, virtually all trade was lost to Hong Kong.

As in Hong Kong, the twentieth century saw wave after wave of immigrants pouring into Macau to escape strife on the mainland – the territory’s population today stands at 540,000 – but, unlike in Hong Kong, this growth was not accompanied by spectacular economic development. Indeed, when the Portuguese attempted unilaterally to hand Macau back to China during the 1960s and 1970s, they were rebuffed: the gambling, prostitution and organized crime that was Macau’s lifeblood would only be an embarrassment to the Communist government if they had left it alone, yet cleaning it up would have proved too big a financial drain – after all, most of Macau’s GDP and government revenue comes from gambling.

However, by the time China accepted the return of the colony – as the Macau Special Administrative Region (MSAR) – in 1999, the mainland had become both richer and more ideologically flexible. A pre-handover spree of violence by Triad gangs was dealt with, then the monopoly on casino licences – previously held by local billionaire Dr Stanley Ho – was ended in 2002, opening up this lucrative market to international competition. Response has been swift, and there are currently 33 casinos in the territory, including the colossal Venetian, one of several US-owned properties. Tourism has increased alongside and the once-torpid economy is boiling, though an unforeseen embarrassment is that mainland officials have been accused of gambling away billions of yuan of public funds during holidays in the SAR. Meanwhile, Macau’s government operates along the “One Country, Two Systems” principle, with very little dissent – the reality is that, even more than Hong Kong, Macau desperately needs the mainland for its continuing existence, as it has no resources of its own. To this end, some giant infrastructure projects – including a bridge to Hong Kong – are in the pipeline, as the SAR seeks to tie its economy closer to that of the booming Pearl River Delta area.