The Portuguese Macao government suffered a reduction of fiscal revenue when Macao (Macau) lost its advantages in the international maritime trade after the Opium War. It thus increased the fiscal revenue by introducing the monopoly system that auctioned the operating rights of certain goods, services, and industries. The highest bidders were granted the franchise to run businesses with law protection and were required to pay commitment fees to the government according to the contract. Some industries, including gambling, opium processing, and prostitution, were also legalised and included in the monopoly system. They even became the economic pillars of the Portuguese Macao government.
In addition to the above mentioned industries, the handicraft industries were also one of the backbones of Macao’s economy from the late 19th to the early 20th century, among which shipbuilding, firecracker, incense, and match were the “Four major handicraft industries of Macao”. Many families engaged in them for a living.
The status of Chinese businessmen did not fall during Portuguese colonisation. Instead, they even partnered with the Portuguese Macao government, from which the former made huge profits by participating in the franchise bidding and grew stronger rapidly. Not only did they participated in the governmental affairs, but also acted as a liaison between China and Portugal, exerting significant influence on politics, economy, charity, and society.
Macao’s urban development also underwent drastic changes from the late 19th century. In order to revitalise the port trade of Macao, the Portuguese Macao government launched a series of land reclamation projects to create large areas of land such as Fai Chi Kei, Areia Preta, and Zona de Aterros do Porto Exterior between the end of the 19th and the early 20th century. These projects brought thorough changes to the Macao Peninsula. In addition, the government also renovated old residential areas and villages into modernised neighbourhoods to improve urban tidiness and hygiene for a better living environment. In particular, the introduction of electricity and tap water in the early 20th century greatly improved the living standards of residents and also promoted Macao’s industrial development.