DECEMBER 20, 1999 VOL. 154 NO. 24

Daniel J. Groshong/Tayo Photo Group Macau prepares for the new millennium and its return to China.

Macau's Big Gamble
The Portuguese colony's return to China will be a low-key affair. The real fireworks will begin when the new owners try to clean up the joint
By ANTHONY SPAETH

One of the biggest international news stories of 1997 was Britain's surrender of Hong Kong to China--an event laden with pomp and political anxiety. Next week, Europe's final remaining outpost in Asia, Macau, will say goodbye to its Portuguese overlords of more than four centuries and revert to Chinese sovereignty. But that flip of history's page is barely causing a ripple of interest, even down the tree-shaded avenues of Macau itself. "Teachers don't talk about it at school," says Choice Choi, a 16-year-old high school student. "My parents, my friends... Actually, nobody talks about it."

The Macau story is a direct echo of the change of destiny for Hong Kong, 60 km away. Chinese President Jiang Zemin will do the honors, as he did in 1997, bringing China a step further toward its goal of regaining all its lost territories, including, of course, the big dumpling: Taiwan. Portuguese President Jorge Sampaio will lay on the grace-in-withdrawal provided in Hong Kong by Prince Charles. After Sampaio departs, Chinese troops will march across the border either to defend or to dismantle China's promise that Macau can keep its independent laws and way of life for at least 50 years.

Macau is no Hong Kong, for sure. Its population of 430,000 is only one-fifteenth that of its neighbor, and its economy even smaller in proportion. Where Hong Kong is a kaleidoscope of trade, finance and high-profit services, Macau is a shadowy blur of blackjack, roulette, poker and prostitution. Since 1996, bloody wars among the triads, or secret societies, have transformed Macau into a mini replica of 1920s Chicago, replete with machine gun assassinations outside casinos and gang leaders with nicknames like "Fatti Pui" and "Broken Tooth." There have been 37 murders this year, up from 28 in 1998.

	ALSO IN TIME
	The Best (and Worst) of 1999 What will stick in the collective memory is the best and worst of our own fin de siècle, and 1999 had a bumper crop of winners and some memorable bummers as well Macau: Macau's Big Gamble The Portuguese colony's return to China will be a low-key affair. The real fireworks will begin when the new owners try to clean up the joint • Extended Interview: 'We Will Make the Triads Uncomfortable' In his temporary government office, Macau Chief Executive-designate Edmund Ho spoke about the future of the territory with TIME Japan: A Fairy-Tale Ending? After years of waiting, Japan's royal-watchers are thrilled over hints that the Princess may be pregnant
	RELATED STORIES
	Cover: The Son of Heaven? A plum trade deal wins Jiang Zemin accolades, but it's probably not enough to elevate him to the ranks of China's immortals, Mao and Deng Jiang Zemin's Big Bash The Mao-suited President stages a huge, highly choreographed show to celebrate the People's Republic's 50th anniversary VISIONS OF CHINA China's Amazing Half Century Navigate through the People's Republic of China and discover the 50 places where history was made
	RESOURCES
	AsiaSource Special Report: Macau Returns to China
	VISIONS OF CHINA
	CNN 50 years of the People's Republic presented by CNN, TIME, Asiaweek and Fortune Asiaweek China's 50th Anniversary Jiang Zemin's coming-out parade [an interactive photo essay]

Macau's past and its politics couldn't be more dissimilar to those of Hong Kong. In their final decade of colonial control, the British started democratic reforms, which were embraced by Hong Kong's populace (and later diluted by the new pro-Beijing regime). Britain's colony was well run, largely uncorrupt and robustly prosperous (though it suffered from the Asian financial crisis that began the day after the handover). The big question was whether Hong Kong's freedoms--including an independent judiciary and a free press--could survive and whether the economy would wither without them.

Macau, in contrast, goes into its transition with a self-censoring press, an antiquated judiciary in need of an overhaul and a partly elected assembly that has virtually shared sovereignty with China for two decades. (Portugal offered to hand the territory over in 1974; China said it could wait. Since 1997, in fact, Macau has technically been considered "Chinese territory under Portuguese administration.") Democracy was never encouraged and corruption is rife, especially in the police and civil service. Also, thanks to the triad wars, the economy is faltering and unemployment recently reached a high of 6%.

So in Macau, unlike Hong Kong of two years ago, the change of sovereignty elicits less dread than hope: that China will restore peace and lure high-rollers back to the all-important gaming tables. The Stone Commune, an alternative theater group, is rehearsing a handover performance in which dancers chant the following unironic lyrics: "I hope the Macau police can do their job properly... I hope those who should die will die... I hope everybody will be happy." In Hong Kong, the essential worry was--and remains--whether China will govern too heavily. In today's violence-wracked Macau, however, the worry is whether Beijing, or anyone else, can govern at all.

In the 1952 Josef Von Sternberg film Macao (using the territory's old spelling), an officer on the ferry carrying Robert Mitchum and Jane Russell to Macau describes the waters surrounding it as "shark soup." In its 440 years of colonial history, Macau has had plenty of sharks on land, too, and still does. Once they were called brigands or bandits. Now they go by names such as Broken Tooth, the powerful triad leader who was sentenced last month to 15 years in prison for a range of misdeeds. After the handover, the person in charge of shark-shooting for China will be Edmund Ho, a 44-year-old banker educated in Canada and chosen to be the first chief executive of the Macau Special Administrative Region. "There will be a lot of challenges," he told Time. "This will be a very long road."

It already has been. Awarded to Portugal in 1557 by the Ming dynasty, Macau was Europe's first Asian colony and for years its only trade outlet with China. But Canton, now known as Guangzhou, supplanted it in the 1770s, followed by other treaty ports. Hong Kong drained away the rest of Macau's trade lifeblood after the late 19th century.

In the past five decades, Portuguese administrators shrugged off the idea of building up the colony's wealth or getting its large Chinese immigrant population to energize the place. Portugal has wanted to bail out for years. In 1967, during China's Cultural Revolution, the colonial administration in Macau published a letter of self-criticism for an anti-China crackdown and later, on Beijing's behalf, ejected a pro-Taiwan group from its shores. After Portugal's own revolution in 1974 and its unsuccessful attempt to return Macau, Lisbon wrote a new constitution for the colony that divided power between the governor and Macau legislators and ended direct elections--a de facto abdication to China.

The colonial government went on to invest in such infrastructure projects as bridges, sewage systems and a spacious but underused airport. Its overriding source of pride, however, was the enclave's cultural distinctiveness--its food, architecture and Portuguese-influenced language--along with a civil service dominated by people of Portuguese descent, known as Macanese. (Casinos, and to a lesser extent tourists, provided the jobs for non-civil servants.) "The Portuguese are cultural imperialists who focused on cultural legacy," says Sonny Lo, a political science professor at the University of Hong Kong. Indeed, the United Nations' cultural wing, UNESCO, has invited Macau to apply for sites like the ruins of St. Paul's Cathedral to receive World Heritage protection.

It will be Ho's job to deal with serious issues of a range surprising for such a small place. To name just the main ones: How to deal with the Macanese, culturally dominant but comprising only 5% of the population, who fear for their livelihoods, culture and language under China? How to defend Macau's freedoms under its Basic Law, which is similar to Hong Kong's embattled mini-constitution? And at the top of Ho's list are questions about gambling: When the gaming monopoly held by tycoon Stanley Ho (no relation) expires in 2001, should the government renew the control of one man over Macau's economy? And in the meantime, how to get the guns and gangsters off the streets?

The crime and casino issues are, Edmund Ho admits, intrinsically intertwined. "Wherever there are triads, there will be fights," he says. "When there is big money, life becomes cheap." Big money flows from the casinos--$3 billion a year--and by some estimates there are 10,000 active triad members. While the precise causes of the gang wars are still murky, their evolution has become more clear. Casino boss Ho blames triads from Hong Kong and the mainland coming into Macau, fracturing the underworld's delicate balance.

In addition, some of Macau's casinos have unauthorized "VIP rooms." These can be lucrative concessions for the triads, which bring in high-rollers and get a cut of the turnover. The pickings grew richer in the 1990s, when casinos opened in new hotels. Meanwhile, Stanley Ho altered his own managing style, letting relatives and associates manage some of the new casinos. The combination of new turf and new gambling managers helped fuel the war. When it went on too long, the Portuguese administration decided to take action, targeting the triad run by Broken Tooth, whose real name is Wan Kuok-Koi. The administration flew in officials from Lisbon to start overseeing Macau's casinos and jails, as well as a Portuguese judge to try Broken Tooth. Targeting the top gangster showed gumption, but it may have made things worse. Says the University of Hong Kong's Lo, who has written a book on Macau politics: "The unintended consequence was to further upset the balance of power among the triads."

So the gang wars go on. Casino tycoon Ho predicts they will worsen if Macau doesn't renew his monopoly in 2001. (In an apparent attempt to hedge his bets, he has also announced plans to invest heavily in the Philippines.) The man on the street thinks the Chinese military contingent that marches across the border on Dec. 20 will frighten the triads into behaving. But Antonio Ng Kuok-Cheong, a local legislator known as Macau's most outspoken democrat, believes China will use the bureaucracy and the courts, on Macau's side of the border and on its own, to end the wars overnight. "The triads know that if the Chinese government wants to get rid of them, it will not use the army," Ng says. "It has many other means."

Chief Executive Ho faces a delicate task. He may need China to be heavy-handed at the start and to lay off later, a strategy laden with risk. And that summons yet another line from Macao, the movie. When Mitchum and Russell arrive in the colony and alight from the ferry, a customs officer gives them a warning. "In Macao," he intones, "everything is a gamble." So it was--and so it will be in the future.

Reported by Martha de la Cal/Lisbon and Wendy Kan and Isabella Ng/Macau