Portuguese traders leased Macau in southern China as a trading port in 1557, and in 1887 Portugal coerced Qing Dynasty China to cede the territory. From Macau, Portuguese merchants embarked not only silks, tea, and ceramics, but also slaves destined for the Americas. When WW2 broke out with the Japanese invasion of China in 1937, the population of Macau exploded from 170,000 to about 700,000 over the next few years as Chinese refugees flowed across the border, which placed heavy strain on the small colony's economy. The Japanese generally respected Macau's neutrality in the war until Aug 1943, during which month Japanese troops crossed the border in an attempt to seize British merchant ship Sian; Macau policemen fought back, and 20 were in turn killed by Japanese troops. In Sep 1943, Japan forced the installation of several Japanese advisors in the government of Macau, thus Macau was unofficially transformed into a Japanese puppet state until the end of the war. US aircraft struck Macau three times, destroying stocks of supplies suspected of having been sold to Japan; Portugal lodged protests for these attacks, resulting in a compensation of US$20,255,952 from the United States to Portugal in 1950. In 1979, Portugal broke diplomatic relations with the Republic of China which had been exiled to Taiwan, and established relations with Communist China, and in the 1980s a series of negotiations took place which ultimately resulted in Portugal transferring Macau to Communist China.
Source: Wikipedia
Source: Wikipedia