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Following the [Opium War] (1839–42), Portugal occupied [Taipa] and [Coloane] in 1851 and 1864 respectively. On December 1, 1887, the [Qing] and Portuguese governments signed the Sino-Portuguese Treaty of Amity and Commerce, under which China ceded the right of "perpetual occupation and government of Macau by Portugal" in compliance with the statements of the Protocol of Lisbon. In return, Macao Government would cooperate with Hong Kong's smuggle of Indian opium and China would be able to increase profits through customs taxes. Portugal was also obliged "never to alienate Macao without previous agreement with China", therefore ensuring that negotiation between Portugal and France (regarding a possible exchange of Macao and Guinea with the French Congo) or with other countries would not go forward - so that the British commercial interests would be secured; Macao officially became a territory under Portuguese administration.

In 1928, after the Qing Dynasty had been overthrown following the [Xinhai Revolution] , the [Kuomintang] (KMT) government officially notified Portugal that it was abrogating the Treaty of Amity and Commerce;Macau Yearbook 2007, 518. the two powers signed a new Sino-Portuguese Friendship and Trade Treaty in place of the abrogated treaty. Making only a few provisions concerning tariff principles and matters relating to business affairs, the new treaty did not alter the sovereignty of Macau and Portuguese government of Macau remained unchanged.Fung, 409-410.

After the establishment of the [People's Republic of China] in 1949, the Beijing government declared the Sino-Portuguese Treaty of Amity and Commerce invalid as an “ [unequal treaty] ” imposed by foreigners on China. However, Beijing was not ready to settle the treaty question, leaving the maintenance of “the status quo” until a more appropriate time.Fung, 410-411.

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