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MACAU: BACKGROUND BRIEF

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1. Macau has existed as a trading post at the mouth of the Pearl River far longer than Hong Kong. It has been under Portuguese administration for over 400 years. Following the Portuguese revolution in 1974, the Portuguese offered to restore Macau to China immediately, but the Chinese refused saying the time was not yet ripe. In 1979, the Portuguese and PRC Governments reached a formal and confidential understanding the Macau was Chinese territory under

Portuguese administration for the time being.

2.

Following the conclusion of the Hong Kong agreement, the Chinese

turned their attention to Macau and opened negotiations on its future with the Portuguese in 1986. Following nine months of negotiations, a Sino-Portuguese Joint Declaration on the Question of Macau was signed in Peking on 13 April 1987 by the Chinese Premier, Zhao Ziyang, and the Portuguese Prime Minister, Cavaco Silva. It provides for Macau, like Hong Kong, to become a Special

Administrative Region of the PRC. The Macau SAR will be

established on 20 December 1999.

3. The Macau Joint Declaration is very similar to the Joint

Declaration on Hong Kong. Most of the differences between the provisions of the two are fairly minor or arise from objective

differences between Hong Kong and Macau, for example in relation to

the judicial and financial systems.

4.

The Government and inhabitants of Macau were not informed of the

progress of the negotiations. There was no representative of the Macau Government in the Portuguese negotiating team. There was surprisingly little interest in the territory, either in the negotiations of the eventual agreement. Indeed, interest is probably greater in Hong Kong than Macau. The general feeling seems

to have been that Macau was already acknowledged to be Chinese territory; that the Hong Kong agreement effectively determined the shape of Macau's future; and that is was predictable that an almost

identical Joint Declaration should lay the basis for a Macau SAR.

CONFIDENTIAL

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