Macao is a Special Administrative Region (SAR) of the People's Republic of China. It was administered by Portugal for 442 years, first as a trading post, and subsequently as a Portuguese territory, until its return to China in 1999. It was the last European territory in Asia.

Located to the west of the Pearl River estuary in Guangdong Province, 40 nautical miles to the west of Hong Kong, Macao's 17.5 square kilometres of territory comprises the Macao Peninsula, Taipa Island and Coloane Island.

In 1553, the Portuguese bribed local government officials in Guangdong to gain permission to drop anchor in Macao's harbour and engage in trade.

In 1557, the Portuguese began to settle nearby. In the period following the Opium War of 1840, taking advantage of the weakness of the debilitated Qing government, the Portuguese successively seized Taipa and Coloane islands to the south of the Macao Peninsula.

In 1887, the Portuguese government forced the Qing government to sign the "Draft Agreement of the Sino-Portuguese Meeting" and subsequently the "Sino-Portuguese Treaty of Peking," which included the statement that: Portugal should administer Macao and subordinate areas in perpetuity, as any other region governed by Portugal. Since that time, Portugal has occupied Macao. The Chinese people have never recognized these unequal treaties. The government of the People's Republic of China has repeatedly enunciated the fact that Macao has always been a part of Chinese territory. As with the Hong Kong issue, China has consistently maintained that at the appropriate time a peaceful, negotiated solution to this problem inherited from the past should be found.

When diplomatic relations were established between China and Portugal in 1979, the Portuguese government formally recognized Macao as Chinese territory and the two sides agreed that the question of Macao should be solved through bilateral negotiations in due time. Between June 1986 and March 1987 delegations from the two governments held four rounds of talks.

Finally, on April 13, 1987, the "Joint Declaration on the Question of Macao by the Governments of the People's Republic of China and the Republic of Portugal" was formally signed in Beijing. The Joint Declaration includes the formulation: "The Government of the People's Republic of China will resume sovereignty over Macao effective December 20, 1999."