Several hundred years ago, the peninsula was shaped like a lotus flower, with a sand bar, the Tangjiwan Road, two kilometers long and ten odd meters wide, like the stalk of the lotus. That was why the Tangjiwan Road was renamed "Lianhuajing" (the stalk of a lotus flower), and a hill at the southern tip of the sand bar like calyx with curled sepals was named Lianhua Hill (Lotus Flower Hill). The water colour on the two sides of the sand bar was different: the west side was clear and blue, while the east side had "red and yellow waves surging up". So it was called "the Red and Black Sea". Besides Lianhua Hill, small hills under the height of 100 meters like Xiwangyang Hill (the West Ocean-Watching Hill, also called Penha Hill now) and Dongwangyang Hill (the East Ocean-Watching Hill, also called Guia Hill now) rose and fell on the peninsula. At the foot of the ridges and peaks cool, sweet and refreshing spring water gushed out from several "Dragon Throat Springs".

To the east, south and west of the peninsula, the blue waves stretched far into the distance, with islands thronging around like trees in a forest. A green and luxuriant small island called Qingzhou (Green Island, also called Ilha Verde now) lay one kilometer away from Haojing to the north-west. To the east, there were Dongaoshan Island, Jiuxingzhou Island and Jiuzhou Sea close by and Lingding Island and Lingding Sea in the distance, and even further in distance was Humen (the Tiger Gate), a gate of Canton. To the west the islands and islets big and small, such as Duimianshan (Lapa), Maliuzhou, Denglongzhou, Wenwanshan, Modaoshan and so on, were scattered all over like stars in the sky, leading to Hutiaomen (the Tiger Jumping Gate), another gate to Canton. In the south, the four islands, Xiaohengqin (D. João Island), Dangzai (Taipa), Dahengqin (Montaha Island) and Luhuan (Coloane) face each other in two pairs with water crisscrossing between them, shaped like a cross, so it was called Shizimen (the Cross Gate). Beyond the Cross Gate tower numerous islands, islets, reefs and rocks with many without names. Resting against hills and surrounded by sea, Haojing was majestic in all its variety. No wonder people would say that its scenery was picturesque.

As early as the Neolithic Age, the ancestors of the Chinese people had already laboured, lived and multiplied in areas around Haojing. In recent years, archaeological excavation in places to the north, west and south, not far from Haojing, uncovered ruins of dunes of 4,000 to 6,000 years ago. Among the articles discovered were tools of production such as stone axes and stone adzes, apparatus for daily life like pottery jars, pottery pots and stemmed pottery cups. The coloured earthenware, unearthed at Hac Sa Beach of Coloane, now part of Macao area, was proved through C14 testing to be precious ancient cultural relics dating from 4,960 B.C. to 4,430 B.C.. At the Barrier Gate, the present demarcation line between Macao and China's interior, a stone axe was unearthed, which, made 4,000 years ago, was beautifully shaped and very sharp at the edge. The coloured pottery and the stone axes were of the same cultural system, which showed that in the prehistoric times when the flame of civilization had not yet been kindled, the area surrounding Haojing was already a place where footprints were left by the Chinese ancestors. Some places in Haojing had dunes similar to those in Tangjia etc., and the Lianhuajing, linking Haojing with the heartland, provided a persuasive evidence that the primitive inhabitants had travelled to and fro through this passage. It is quite possible that as early as in the prehistoric times the primitive inhabitants might have laboured or even resided on this piece of land either temporarily or permanently. In the Shang dynasty (1766 B.C. - 1122 B.C.) and Zhou dynasty (1122 B.C. - 231 B.C.), the ancient inhabitants continued to live and move about here. Among the unearthed cultural relics there were guis (round-mouthed food vessels with two or four loop handles) and jars of Spring and Autumn Period (841 B.C. - 476 B.C.), pottery bowls of Warring States Period (475 B.C. - 231 B.C.), and near Lianhuajing there was a bronze axe proven to be a relic of the Spring and Autumn Period, 2,000 years ago.

When the Qin dynasty unified China for the first time in the 3rd century B.C., this area began to become part of China's territory. First it was part of Fanyu County of Nanhai Jun (a jun is an administrative district like a province or state). Later, beginning in the Jin dynasty (265 A.D. - 420 A.D.), it belonged to Dongguan County; in the Sui dynasty (581 - 618), it was part of Nanhai County; in the Tang dynasty (618 - 907), it returned to Dongguan County. There are, however, few records relating to Haojing until the Northern Song period (960 - 1126), when people in north China began to pay more attention to this seaboard place in the south.

Taiping Huanyuji (Records around the Peaceful World), printed in the Northern Song period, called Wugui Mountain (Five Osmanthus Mountain) adjacent to Haojing "Xiangshan Mountain" (Fragrant Mountain), and said: "This is a place where the immortals appear frequently with plentiful exotic flowers and rare plants". The land adjacent to the Fragrant Mountain, in the mind of the people, should also be a "fairyland" with fragrant flowers all over the place, where the celestial appeared and disappeared from time to time. More prosaically, Yuanfeng Jiuyuzhi (the Chronicles of Nine Regions in Yuanfeng period (1078 - 1085) of the Northern Song dynasty) recorded: "Dongguan has Xiangshanya silver workshops, Xinhui has Jindou saltworks". These industries, giving evidence of some economic development, were only a dozen miles from Haojing.

In the Southern Song period (1127 - 1279), when the inhabitants in north China moved to the south to escape from the iron heels of the northern minorities, the economy in the area developed further. In 1152 the Southern Song government divided Dongguan County and set up Xiangshan County with the coastal areas of Nanhai, Fanyu and Xinhui counties annexed together, and Haojing was put under the jurisdiction of Xiangshan County. At first, it belonged to Gongzi Wei (roughly equivalent to cun, the present grassroots administrative unit, including several small villages), Yanfu Li (roughly equivalent to present township), Xiangshan County; later on it was changed to Gongchang Du (roughly equivalent to present cun), Changan Xiang (Township). The distance to Xiangshan County seat was 70 kilometres by land, 80 kilometres by water. From then on, more migrants came and settled down in the areas adjacent to Haojing. For instance, during the Jiajing period (1208 - 1224), the Rongs settled down in Shawei, looking at Haojing only over a strap of water. In 1237 the Yangs settled down at Beishan north of Lianhuajing. The newcomers came mostly from one place: Zhujixiang, in Baochang County, in Nanxiong Prefecture. Zhujixiang had been established by migrants from the North, showing that most ancestors of the migrants residing in the area around Haojing were from northern China.

At the end of the Southern Song period, the court made a last stand here against the Mongolians. In early January, 1278, Song Emperor Zhao Xia, only ten years old, escaped to Jingao, the Fairy Harbour of Dahengqin, after Canton was fallen into the enemy's hands. Several days later Jingao was assailed by a storm. Because "the storm destroyed their ships and Zhao Xia nearly got drowned", he went into shock and fell ill, and before long he died at Dayushan Island, to the east of Haojing. On the sea near Jingao, the Mongolian troops and the Song troops commanded by Zhang Shijie fought a big naval battle that ended in disaster for the Song forces despite early gains. Soon afterwards the prime minister of the Southern Song dynasty, Wen Tianxiang, was arrested by the enemy. He passed the Lingding Sea (the Lonely Sea), to the east of Haojing, under escort and wrote the famous immortal poem of "Passing the Lonely Sea", in which the verse:

became the peak of poetic perfection for all time. Even after the Southern Song court was completely destroyed at Yashan, west of Haojing, the unyielding adherents of the Southern Song dynasty still held the banner of resistance against the Yuan Empire established by the Mongolians at Fairy Harbour. This piece of land, red with blood shed for in a just cause, naturally became the focus of people's attention. Countless people of later generations came here, pacing up and down, lamenting and mourning those who died for the nation. If the East Ocean-Watching Hill (Guia Hill) and West Ocean-Watching Hill (Penha Hill) could talk, they might tell you vividly the solemn and stirring past events they had witnessed!

It is estimated that the peninsula where Haojing was located was first inhabited when the Southern Song dynasty finally collapsed. At that time the Southern Song army and people retreating to places around the Cross Gate and Yashan numbered hundreds of thousands. It is very likely that some people came to the peninsula to look for fresh water and food. After the defeat at Yashan, some Song officers and soldiers and their dependents might very well have taken this peninsula as a place to hide out. In recent years, at places near Haojing, i.e. Xiangzhou, Dachong, Qianshan, Sanzao etc., large numbers of coins buried by the South Song army and people were excavated. Recently a "Zhao Family Tree" was found at Nanmen Township of Doumen County, Zhuhai City, which showed that this royal family settled down at Nanmen Township not far from Haojing at the time when the Southern Song collapsed. It is said that a temple for the local god of land, at Patane north of Haojing, called Yongfu Ancient Temple, was built at the end of the Southern Song dynasty, but the folklore has not yet been proved.

In the late Yuan dynasty (1279 - 1368), Dahengqin Island became a hide-out place for a group of pirates led by Wang Yi. In the late 14th century when the Ming dynasty (1368 - 1644) had just established itself and suppressed pirates, the first Ming Emperor ordered this island kept vacant, because with precipitous mountains that island was favourable for the pirates to hide themselves. But in the other places in the surrounding area, including Haojing, the Ming government allowed people to reside as they chose. Later on, with the arrival of large numbers of immigrants, the population in and around Haojing swelled. New land was cultivated and new villages were formed. In 1787, a report to the authorities written by the elders in the village of Mongha, Li Wenxiong, Chen Fenxian and the village head Chen Fangting said that their ancestors "lived and made a living here, and were buried here" as early as over 300 years ago. It is thus clear that the ancestors of the Mongha village people moved to the Lotus Flower Peninsula about the middle of the Ming dynasty. Because the population in the coastal region of Xiangshan County was gradually increasing, the Ming government strengthened its coastal defence in this area too. During the Chenghua period (1465 - 1487), the Ming government built a fort at Sanzao Island at the side of Dahengqin. Until a few years ago, one still could see the remains of this ancient military facility.

On the rocky and lotus flower shaped peninsula, the inhabitants mainly earned their living by farming and fishing. With a shortage of arable land on the peninsula (only the area around Mongha had some), the people in Haojing and Mongha made their living mainly through fishing and picking up oysters. Oyster was delicious and nourishing, and was regarded as a delicacy by the people in Guangdong as early as in Tang dynasty (618 - 896). The local people fully exploited the oyster resources through cooking oyster with fermented soya beans or making oyster oil by frying, and these products became local special products later on. People also knew how to burn the shell of oyster into lime to be used as building material. Beside oyster, there were also hundreds of types of fish and dozens of other aquatic products such as lobster, crab, shell, algae and sea animals, including the very rare grouper. Since Haojing abounded with gifts of nature in aquatic products and with two bays of shallow water serving as good harbours for fishing boats to anchor, it was very natural that fishery would develop. By the early 16th century at latest, the local inhabitants had built a temple for the Goddess of Sea here, i.e. the A-Ma Temple. This temple, towering at the entrance of the Northern Bay, was a symbol of Haojing's becoming a fishing port.

Occasionally, ripples would be stirred up in the peaceful and quiet life of the local people, because some foreign merchant ships sailed in and anchored here. The reason for the foreign merchant ships' visiting here was that Canton, 100 odd kilometres away to the north, had been a pivot for trade between China and foreign countries almost since the Jin dynasty (265 - 420). In the early Ming, the government put Shibo Tijusi (Maritime Trade Supervisor) in charge of the trade with Siam, Cambodia, Vietnam and Sumatra etc. in the form of "paying tribute to the Chinese emperor". When the merchant ships sailed in and out of Canton, they usually went via Dongguan County and took Tunmen Island in the Southeast of the estuary of the Pearl River as a temporary mooring place. Sometimes, they also anchored at Jiqi and Hutoumen of Dongguan County, Guanghai and Wangdong of Xinning County, Qitan of Xinhui County and Langbai (Lampacao) and the Cross Gate of Xiangshan County etc.. By the end of the 15th century and the beginning of the 16th century, more foreign ships sailed via Jiuzhou Sea in the south-west of the estuary of the Pearl River, making Jiuzhou Sea a communication hub of the foreign ships. Haojing was near Jiuzhou Sea and had houses, inhabitants and two good shallow water bays. In order to get fresh water, buy food or escape a storm, the ships would occasionally enter the bays and anchor there. Thus, Haojing gradually began to attract the attention of the foreign merchants, as a suitable harbour near Canton. At the beginning of the 16th century, the Portuguese, who had just arrived in the Far East, might already hear of this harbour: "Beyond the port of Canton there is another port which is called Oqeum; it is three days journey by land and a day and a night by sea." Judging from the pronunciation of "Oqeum" and its geographical location, "Oqeum" is probably Haojing. At that time the water area where the ships anchored was also called "ao", so Haojing was also called Haojingao.

The above historical facts show that in the prehistoric times the ancestors of the Chinese nation were already moving around in the area now called Macao. At the end of the 3rd century B.C., the Macao area became part of the Chinese territory. In the 13th century, the army and people of the Southern Song dynasty made a final resistance against the Yuan Army in this area. By the 14th century or 15th century at latest, there were already people inhabiting the Macao Peninsula. However, in recent centuries some Western historic books have said that as late as the middle of 16th century the Macao Peninsula was a no man's land, a wasteland for pirates to hide out in. This misconception stems from the complexity of the sources and the difficulty in obtaining accurate historical materials. Historical records about the early history of this coastal area were far and few between; even the Chinese who knew this place in ancient times were very few indeed. There is nothing surprising in foreigners' failing to understand it completely.

After the middle of Ming dynasty, the traditional Chinese society might very well have gone along in its original course for at least another 300 years. So was the life in Haojing. But with the Portuguese coming eastward, the development process of Haojing was changed fundamentally.

In 1497, the Portuguese, who were brave with a pioneering spirit, rounded the Cape of Good Hope and opened a new route linking the East and the West. At the beginning of the 16th century they forcibly established colonialist rule at Goa, Malacca and Molucca Islands. Portuguese merchants arrived at China's territory in 1513 or 1514 for the first time. Soon afterwards, other Portuguese came to the coast of Guangdong as well, trying to establish trade with China. For instance, in 1517, Tome Pirez, as a Portuguese envoy, sailed into Humen (The Tiger Gate) and forced his way to the city wall of Canton, requesting an audience with the Chinese emperor as an envoy of the "Franks". At first the Ming government did not want this envoy from an unknown country to come and "present tribute", but Pirez and his party manoeuvred their way into China's capital. At the end of that year, however, the King of Malacca sent a letter to Beijing asking for help, exposing the true colour of these "Franks". Moreover, the Portuguese who remained in Guangdong acted wantonly, going so far as to loot and to traffic in persons. Their behaviour aroused public indignation in Guangdong. In 1521, the Ming government arrested Pirez and expelled the Portuguese occupying Tunmen (Tamao) Island. Both in the Tunmen battle and the battle fought later on at Xicaowan of Xinhui County, the Ming Army was victorious, forcing the Portuguese to withdraw from the coast of Guangdong.

When the "Franks" had been driven out, the conservative forces among the Guangdong officials gained ground. They adopted a uniform closed door policy, even prohibiting merchant ships from the South-East Asian countries from entering port to trade. As a result, Guangdong and Guangxi provinces reaped what they had sown: "since the revenue of the two Guangs was mainly from commercial taxes, without the coming of foreign ships, both the individuals and the government became poor." Guangdong did not reopen its door to the sea until 1529, at the request of the new Governor of Guangdong Province Lin Fu. In order to prevent the merchant ships of the "Franks" from breaking into Canton again, the Ming government ordered the merchant ships from the South-East Asian countries to anchor at places near Canton, and waited for the authorities to deal with them. So merchant ships from Siam, Vietnam etc. entered harbours in Xiangshan, Xinhui and Dongguan counties to anchor and wait there for the Chinese officials to collect tariffs. And trade with the Chinese merchants were also carried out there on the ships. At the same time, the Ming government took precautions. Troops under the command and direction of Haidao Fushi (the Deputy Surveillance Commissioner for Coastal Inspection of Guangdong Province) and Beiwo Duzhihui (the Provincial Commander dealing with Japanese pirates), patrolled the coast with increased vigilance, and sentries and officers were stationed at every harbour.

Among the ten or so harbours, Langbai with its wide bay and central location gained pre-eminence before long. In 1564, Guangdong Yushi (the Censor to Guangdong Province), Pang Shangpeng, said that the foreign ships had all moored at Langbai and other harbours in the past. Langbai was thirty kilometres west of Haojing, and was considered "a remote place in the outer sea". As far as the Chinese and foreign merchants were concerned, Langbai harbour was not an ideal place for trading. First, Langbai was "separated by sea", too far away from Canton and inconvenient in communication. Moreover, both Chinese and Japanese pirates often appeared along the coast of Guangdong, and in summer typhoons were quite frequent. Thus to do trading at that place was not good for the further development of trade. Second, Langbai was a desolate harbour short of fresh water. The supply of grain, vegetables and fresh water was far inferior than that of others. Moreover there were no houses for people to live in, which made it difficult for the foreign merchants and sailors to stay long. For these reasons, some businessmen of South-East Asia regarded Haojing, at the mouth of the Pearl River, as a much better trading spot.

According to the records in books like Ming Shilu, Xizong Shilu (The Verified Records of Ming, the Verified Records of the Emperor Xizong), Ming Shi (The History of Ming), Aomen Jilue (The Brief Records of Macao), the Guangdong authorities allowed foreign merchant ships to sail into and anchor at the Harbour of Haojing in 1535. Thereafter Haojing became a place for trade between China and foreign countries like Langbai and others. The records also point out that the change was the result of a bribe given by foreign merchants to a Chinese Zhihuishi (Battalion Commander), but they differ in regard to this important person's name. In Xizong Shilu the name is given as Huang Qiong, in Ming Shi as Huang Qing, and in Dianbai Xianzhi (The Chronicles of Dianbai County) as Wang Du. In Guangdong dialect "Huang" and "Wang" are pronounced the same, and Qiong, Qing and Du were either pronounced similarly or written similarly, so copyists' errors could be to blame for the variety. In the meantime, none of these names appears in the lists of various local chronicles, so we may doubt whether there existed such a person at all, or whether the historical records are reliable. Since that time the society revered literati, but looked down upon martial qualities, the names of most of the more than 800 military officers in the region went unrecorded. Moreover, the historical materials quoted below also show that before 1554 Haojing was already open to the outside world. Therefore, unless we can find more accurate historical materials that supersede this record, we can deduce that around 1535 Haojing was opened up by the Guangdong authorities as a harbour for foreign trade. In the words in Aomen Jilue (Brief Records of Macao), we can say that "Haojing's foreign trade market was started by Huang Qing".

In recent years, some Chinese scholars have argued that Haojing was opened in 1553 instead of 1535. Their argument is based on The Chronicles of Guangdong Province printed in 1602, which says:

However, the passage just before that one reads:

This proves that before 1553 the harbour of Haojing had already become one of the places like Langbai where foreign ships could anchor, that is, it was already open to foreign merchant ships.

Compared with Langbai, which was rather isolated, Haojing as a trading spot was advantageous both to the Chinese and foreign merchants and to the Guangdong authorities. First, Haojing was nearer to Canton and the mouth of the Pearl River. By trading at Haojing, Chinese merchants could save their transport costs and reduce the risk in shipping the goods, and the same was true for the Guangdong authorities when they shipped back the articles of tribute and goods used as tax payment in kind. Second, the area around Haojing already had a lot of inhabitants. In places separated with Haojing by a strap of water like Qianshan, Beishan, Jida and Shawei, there were quite large villages, so the foreign merchants doing trade here could easily buy food and other daily necessities. Third, Haojing had plenty of fresh water from spring, well and river to supply both the daily needs of merchants and the outgoing ships. Fourth, the peninsula where Haojing was located was linked by road to the mainland, offering a land route to facilitate trade. Although the opening of Haojing resulted from bribery of one or more Ming officials by merchants from South-East Asia, the change did contribute to the development of trade between China and foreign countries.

When Haojing was being opened to the outside, the Ming government further streamlined its system for foreign trade, which could be summarized as "fixed places for anchorage", "promulgated regulations for taxation". At that time, the foreign merchant ships could only anchor and trade at about 10 places, including Langbai and Haojing, but they could choose any of them. In about the 1550s, an official from the office of Buzhengshi (the Provincial Administration Commissioner) of Guangdong pointed out that "in the past the mooring place for the ships from Siam, Malacca and others was not fixed. They anchored at places such as Guanghai and Wangdong of Xinning County, Qitan of Xinhui County, Langbai, Haojing and Shizimen of Xiangshan County, and Hutoumen, Tunmen and Jiqi of Dongguan County etc.. The Chronicles of Guangdong Province printed in 1602, describing the opening of Haojing in detail, agrees that before 1553 the foreign ships coming to China could anchor at Guanghai and Wangdong of Xinning County, Langbai, Haojing and Shizimen of Xiangshan County, and Hutoumen, Tunmen and Jiqi of Dongguan County.

At that time, there were only a few ships paying tribute to the Chinese emperor sent by the kings of foreign countries. The majority were merchant ships carrying goods for trade. In order to increase tax revenue, the Guangdong authorities allowed all of them to trade, no matter whether they were tribute ships or not. When a foreign ship arrived in a harbour, the officers guarding the harbour would make inquiries and then report to Deputy Surveillance Commissioner. The report would be passed up to Anchashi (the Surveillance Commissioner of Guangdong) and the Governor of Guangdong. The top officials would send an able and honest magistrate over to collect the taxes due. According to the regulations laid down in 1517, this official would take 20% of the goods on board as tax and "store them at the storage house of the Provincial Administration Commissioner of Guangdong, to be either sold or used as salary payment for officials". The rest of the goods could be freely traded by the foreign merchants with their Chinese counterparts.

Since the ships of the time relied on favourable winds, they usually sailed to the Chinese coast in May with the south-west monsoon and returned by the north-west monsoon at the end of October, so trade between China and foreign merchants in these harbours usually took place in summer and early autumn. But some foreign merchants remained in these harbours for a long time, not even returning in winter, "because of failure to sell out their goods". So the Chinese officials guarding the harbours allowed them to put up sheds and stay ashore temporarily. They could keep these sheds until they had sold all their goods and were going to sail home. Soon afterwards, the merchants of various countries followed suit one after another. They built sheds on shore to live and carry out trade, and transferred the buildings to new-comers when they left. According to existing records, "the price for one shed was several hundreds of taels of silver".

Nevertheless, at that time, the foreign businessmen had no ulterior motivation of occupying China's territory. They all observed the laws and decrees of the Ming government, "abided by the rules for taxation and checking", and "came with goods fully loaded and left with goods sold out". It had never been happened that they occupied a place and refused to leave, so nothing important had ever taken place in harbours like Langbai and Haojing, which otherwise would have attracted the attention of the Guangdong authorities. On the other hand, through levying trade taxes the Guangdong authorities "gained a lot".

During this period, Haojing, as a harbour opened to the outside world, underwent certain changes. When the foreign merchant ships sailed to other harbours in the early summer of a year, Haojing would remain a quiet place as before, but if one or more foreign merchant ships came and did trade here, then things would be entirely different: the tax collectors, the Chinese merchants with their goods, the peddlers selling various daily necessities, the workers doing loading, unloading and transportation of goods, and the interpreters dressed in foreign clothes and speaking the foreigners' languages came one after another. A scene of noise and excitement with a convergence of ships and people hustling about emerged in Haojing, and sometimes a batch of newly built sheds would appear. Under such a circumstances, the inhabitants in Haojing and the surrounding area increased their income by supplying the Chinese and foreign merchants with food and carrying goods for them. With the passing away of autumn and the coming of winter, after the foreign merchant ships and Chinese merchants left for home, Haojing would quickly became quiet and cheerless again. The inhabitants of Haojing spent their winter and spring in such an atmosphere and waited for the return of the foreign merchant ships.

Because Haojing had opened to the outside world later than Langbai, its position in the trade between China and foreign countries was less important. The Guangdong authorities stationed 500 maritime sentries with eight big ships and eight patrolling boats led by one battalion commander at Langbai alone, while there were only 200 naval sentries and 100 militia with four big ships and two large warships led by one Qianhu (a vice battalion commander) or a battalion commander guarding other harbours including Haojing. Clearly, before 1553, among all the harbours opened to the outside world, Haojing was still legged behind.

Not long after Haojing was opened to South-East Asian countries like Siam and others, the "Franks" whom the Ming government had once tried to expel also entered the port. The Portuguese had peeped at Haojing for a long time. When it first opened, however, they took no immediate action because after receiving a heavy blow at Tunmen and Xicaowan in Guangdong, they had turned their attention to Zhejiang and Fujian provinces and occupied a number of ports early or late and had tried to set up colonial strongholds at these places. Since 1549, the Ming troops under the command of the Zhejiang Governor Zhu Wan and others had been launching attacks against the Portuguese. They recaptured these ports one by one, and finally inflicted a crushing defeat on the Portuguese at Zouma Creek, Zhaoan County, Fujian, forcing them to retreat from the coast of Zhejiang and Fujian.

From then on, some Portuguese colluded with Guangdong pirates led He Yaba and wantonly looted the coastal areas of the province. Moreover, some Portuguese used Shangchuan Island, west of Langbai, as a stopover on their way to Japan, and illegally put up sheds, staying and carrying out trade there. While passing the Chinese coast, they always felt nervous, because the Ming government had beaten them in the past. Whenever they were chased by Ming warships, they would hurriedly flee to the ocean, regardless of fierce winds and angry billows. As a result, Portuguese merchant ships sailing to China and Japan often sank or "disappeared". Under such circumstances and with many years' experience, the Portuguese Captain, Leonel de Souza, and others understood that China with a vast territory and highly-developed culture, could not be bullied and invaded like the small and weak countries in Africa and South-East Asia. If they wanted to enter Chinese ports and carry out normal trade with China at all, the only way was doing it through "peaceful" means.

In 1554 (Jiajing 33), the Portuguese made good their aim of entering China's harbours like Langbai, Haojing and others. As to exactly how the Portuguese entered Haojing, the Western and Chinese records differ somewhat. The Chronicles of Guangdong Province printed in 1602 wrote:

Zheng Shungong wrote in his A Glimpse of Japan:

The two sources show that the Portuguese obtained the permission to trade in ports like Haojing by assuming the name of another country and bribing the Deputy Surveillance Commissioner Wang Bai.

What was recorded by the Portuguese is more detailed. Among such materials, the most valuable and most credible material was the letter written by Leonel de Souza in January 1556 to Prince Luis, the younger brother of King John III of Portugal. The letter reports that Souza "had gone to China in a merchant vessel in 1552, but had not met with much success in business, because the Portuguese, being classified as 'Franks', were forbidden the use of Chinese ports". Souza therefore gave orders to all Portuguese who happened to be in Chinese waters not to land or to do anything to antagonize the Chinese, and then entered into negotiations with the Chinese authorities to bring about peace, promising that they would undertake to pay 20% in customs duties like the Siamese merchants. Souza also declared that the Portuguese were no "Franks", and when a large sum of money had been spent on "gifts", the Chinese Deputy Surveillance Commissioner finally approved the Portuguese to trade with Chinese merchants in Canton and a few other specified ports. But Souza and others coming to China had not been chartered by the Portuguese King, and there was no written form of "agreement" between Souza and the Chinese officials. At the same time, their coming to China to do trade had to be approved by the Chinese Emperor, and the journey to the capital took three to four months, so they didn't get formal permission until the next year. Another Portuguese source records that: "In 1554, a captain called Leonel de Souza reached such an agreement with the Chinese that after paying a tax, the Portuguese were allowed to trade in various ports."

Despite minor differences, the Chinese and Western sources agree on the basic facts. The records cited above and other Chinese and Western records show that in the second half of 1553, Souza both expressed the willingness of the Portuguese to pay various kinds of taxes to the Ming government and bribed Wang Bai, so Wang Bai allowed the Portuguese to trade in Guangdong. The Ming central government gave its approval several months later, and the Portuguese began to carry out trade with the Chinese merchants in ports like Langbai and Haojing in 1554. From then on, the Portuguese anchored in harbours like Haojing and carried out trade there just like the merchants from the South-East Asian countries. They did not invade or occupy Haojing in 1553 or 1554 as some Chinese scholars have claimed in recent years. Still less is what some Western scholars have claimed that the Portuguese occupied Haojing and established a "colony" there after they had driven away pirates.

The question of why Wang Bai and others permitted the Portuguese to trade in Guangdong worth study. About half a century later, Guo Fei said that Ding Yizhong, Anchashi (the Surveillance Commissioner of Guangdong Province, the direct superior of the Deputy Surveillance Commissioner) was strongly opposed to allowing the Portuguese to do trade in Guangdong. But the "Franks" violated the ban, went to Guangdong secretly, and "flattered" Wang Bai into consenting. So Ding Yizhong argued: "we must look before we leap, otherwise it will be troublesome for Guangdong in the future". But Wang Bai paid no attention to the warning. According to records written in Western languages, the Chinese Deputy Surveillance Commissioner had accused some Souza's compatriots of collusion with Chinese pirates in raids on coastal areas, and Souza, too, had harsh words for the behaviour of his countrymen. The records show that it is possible that Wang Bai and other officials of Guangdong might have known quite well that Souza and his followers were the "Franks", who ought to be expelled, or that some of Souza's compatriots were fighting with Chinese troops. Under such circumstances, the very fact that Wang Bai defied the opposition of his immediate superior, the Surveillance Commissioner of Guangdong, and permitted these "Franks", or at least foreigners whose identities were unknown, to come and carry out trade cannot be attributed simply to Wang Bai's accepting bribes. Much more important motivations must be sought. It is impossible for Wang Bai to do so without the approval of the other top officials in Guangdong like the Viceroy of the Two Guangs and the ultimate approval of the Ming government.

One possible explanation is a desire for peace. At that time, the Japanese pirates had mounted a large-scale offensive against the Chinese coast. Ming troops had fled pell-mell before them, leaving thousands of miles of the south-eastern coast exposed to attack. Colluding with foreigners, a bandit chief called He Yaba in Dongguan County looted wantonly, bringing serious disasters upon the Guangdong area and posing a severe threat to the Guangdong authorities. Faced with such a serious situation, it was natural that the Guangdong authorities would have wanted to make peace with the foreigners, even though they were an old enemy, for the foreigners had taken the initiative to seek an end of hostilities and normalize trade relations.

At the same time, Guangdong and Guangxi relied upon trade for army provisions and payment. At that time, the troops were in frequent use and the soldiers' payment and provisions were in great shortage. To the Guangdong authorities, it would have been most welcome to have more foreign merchant ships coming to Guangdong to trade and pay regular customs tariffs. Therefore, the Ming government was as eager for peace as the Portuguese, and the peace proved beneficial to both sides.

In the initial years after the establishment of normal trade relations between Portugal and China, most of the Portuguese merchant ships went to the harbour of Langbai, and some of the Portuguese merchants even went directly to Canton. Those who entered Haojing first were missionaries and Portuguese merchants without charter from the King of Portugal. These Portuguese merchants benefited China; they abided by the taxation regulations, came with full loads of goods and left with goods sold out without obvious violation of the decrees of the Ming government just like the other merchants from the South-East Asian countries. Some foreign sources recorded the behaviour of the first Portuguese to come to Haojing. Among them was a missionary called Gregorio Goncalves. He was sent to Haojing by the Malaccan church authorities immediately after they heard the news of peace between China and Portugal. At the time of his arrival at Macao, which might have been in 1555, there were only six other Portuguese living in Haojing. Later on, a document written by Goncalves in about 1570 implies that the merchants who spent two trading seasons in the "lotus flower peninsula" (Haojing) in 1555 did not have a royal charter. In November 1555, a famous Portuguese traveller, Fernao Mendes Pinto, and a Jesuit father, Bechelor Nunes Barreto, who had visited Langbai and Canton, came to Haojing. Here they met the Captain-Major of the Japan Voyage Duarte da Gama, who was appointed by the King of Portugal, and the carrack returning from Japan to India under his command. Pinto also wrote to his companions in India from Haojing, pointing out that this Chinese sea port was six leagues away from Langbai.

It is also believed that the great Portuguese national poet, Luis de Camoes, came to Haojing in 1556 from India as a custodian of the deceased and absent person's property. He stayed at Haojing for two to three years, and drafted many paragraphs of his immortal masterpiece "Lusiadas" in a stone cave in the north-west of Haojing.

But before long, some Portuguese gradually revealed their true colours as colonialists, attempting to occupy Haojing. From about 1557, they colluded with certain profiteers, shipped in large quantities of bricks, tiles, timber and stone, forcibly built houses and began to settle down in Haojing illegally. In less than one year, several hundred sturdy Western-style buildings appeared, signalling the Portuguese settlement in Haojing. Being bribed, the Chinese officials garrisoning the port tolerated such illegal actions. The Guangdong top officials made no serious attempts to drive the Portuguese out, because only the foreign merchants could supply the court with ambergris and other exotic products.

Because of increased foreign trade, the local population in Haojing (largely Chinese) increased from four hundred in 1555, to five or six hundred in 1561, and eight hundred in 1562. At that time, most of the Portuguese were concentrated in Langbai, perhaps as many as five or six hundred. But after 1862, the Portuguese population moved en mosse to Haojing, either voluntarily because Haojing was superior in water supply, living and trading conditions, or possibly because they were driven out by the strong Chinese troops stationed at Langbai. Haojing became the only Portuguese settlement in China.

In the meantime, because pirates had intruded into Chaozhou in 1559, the Chinese government forbade all foreigners to enter the city of Canton. Pan Jixun, the Censor in Charge of Guangdong Affairs, strongly advocated "prohibiting the Franks from landing and coming to the provincial capital, but allowing them to trade on the sea". So all trade was carried out in various harbours near Canton. Seeing that the foreigners in Haojing were quite rich, and that one might reap ten times of profits through doing trade there, the Chinese merchants flocked into Haojing, and so did various craftsmen, because the Portuguese solicited them with much higher payments. As a result, Haojing replaced Langbai as the centre of trade between China and foreign countries.

By 1563, nine hundred Portuguese had gathered in Haojing, plus several thousand slaves, whom they either seized or bought from Africa and South-East Asia; in addition, 4,100 Chinese also lived there. Nearly a thousand houses and churches had been built without the permission of the Chinese government. After 1563, the Portuguese population was in constant flux. Successful traders returned to India or Europe with their gold and treasures, and others took their place: fidalgos and others looking for opportunities to make their fortune here. The local Portuguese population and illegal constructions continued to increase. Merchant ships from various countries, over twenty a year, all sailed to Haojing. Meanwhile the Portuguese forced ships that wanted to trade at other harbours to come to Haojing, so trade at places like Langbai, Tunmen and Jiqi languished, while Haojing thrived.

After the Portuguese had established their settlement in Haojing, the Portuguese Viceroy to Indian, regardless of China's sovereignty over Haojing, presumptuously subjected the area to Goa, stipulating that the Portuguese who lived in Haojing should be under the jurisdiction of the Captain-Major of China and Japan Voyage, which sailed from India to China and Japan once a year. The post of Captain-Major was conferred annually by the King, or by the Portuguese Viceroy to India in his name, upon a fidalgo or gentlemen whose services had been excellent and who deserved a particularly lucrative reward. If the Captain-Major could not or would not make the voyage himself, he could sell his privileges to another, who then made the voyage with the same prerogatives. After starting from Goa or occasionally from Malacca or elsewhere, the Captain Major became the recognized chief of all Portuguese ships and settlements he might meet between Malacca and Japan, and the official representative of Portugal vis-a-vis the Chinese and Japanese authorities.

From May to June of every year, the Captain-Major of the Japan Voyage (the "China" was usually omitted from the title as understood) of the year started the voyage in a carrack or with a fleet by the south-west monsoon. In order to purchase Chinese goods or wait for the next monsoon season, he usually stayed at Haojing from ten months to one year. During this period, he was the supreme commander responsible for everything, including military, administrative, legal and trade affairs in Haojing Portuguese settlement. From June to August of the next year, after the predecessor set off for Japan, the next Captain-Major would arrive at Haojing already and begin his turn of ruling over this settlement.

Due to various reasons, including the time of monsoon, it often happened that two or even three Captain-Majors appeared in the settlement at the same time. In 1564, two Captain-Majors arrived at Haojing at almost the same time. A fierce dispute took place as to who should be the supreme ruler of this settlement, which nearly caused an armed conflict between them. That dispute did not calm down until the local religious figures intervened. Afterwards, it was stipulated that under such circumstances, the one who was appointed the earliest was to be in power. The only exception in this period was the following: out of the need to send an envoy to China, the Portuguese Viceroy to India appointed Diogo Pereira as the leader of the Portuguese in Haojing. Pereira assumed this position from the autumn of 1562 to the autumn of 1564. His special duty was to control the Portuguese in Haojing, to prevent them from acting outrageously, so that the coming envoy would not follow the same disastrous road as Tome Pirez, who had died in a Chinese prison 40 years before.

Before Pereira assumed his post, due to long stay and the prosperity of trade, the Portuguese in Haojing had been getting more and more overbearing. They not only bullied the merchants from the South-East Asian countries, but also reversed the position of host and guest, bullying the Chinese merchants, and even looking down upon the Chinese officials and refusing to pay customs tax. Their behaviour went from bad to worse until the Guangdong officials begin to feel that the problem was too serious to be neglected. They feared that the Portuguese should occupy Haojing and become a hidden danger for Canton at its elbow and armpit. Especially they were afraid that the Portuguese might change their idea from seeking profits through trading to "swarming into Xiangshan to occupy it" or even invading Canton, causing a severe disaster. The officials in Canton began to discuss ways to deal with this group of "uninvited guests", and in 1559 put forward stratagems to "subdue the foreigners".

Three main stratagems were suggested: first, blocking the narrow spot of the harbours of Haojing to prevent the foreign ships from sailing secretly so as to consolidate the door of Xiangshan; second, setting their buildings on fire to expel them; third, stationing soldiers led by a military official in a new battlement at a hill pass difficult to access and strategically located between Haojing and the mainland, so that "neither the Chinese nor the foreigners could go in and out without permission." Later on some people suggested destroying the Tanjiwan Road, i.e. blocking the stalk of the Lotus flower, so as to cut off the land route between Haojing and inland.

With the first and the third stratagem, foreigners would be allowed to reside and trade in Haojing, and with appropriate precautions taken, an invasion of the mainland could be prevented. However, "moving the stones to fill the sea was too costly and could hardly be financed", while building battlements posting more military officers required authorization from the court. The Guangdong authorities decided on the second stratagem, but their attempt to set the Portuguese buildings on fire failed. From then on the Portuguese were on the alert. "With weapons in hand, they usually kept an eye on the Chinese, closely watching out for their movements", making arson more difficult. Therefore, major efforts would be needed to drive the foreigners out of Haojing.

Just in these years, the Japanese pirates launched fierce attacks on the Ming troops in various provinces along the coast, while a large group of Chinese pirates was forming along the Guangdong coast, and a peasant uprising started to gain strength and impetus in Guangdong. At the same time, the Ming court and the commonalty dared not to mention maritime banning any longer after Zhu Wan was forced to commit suicide, who had rigorously advocated a ban on maritime trade and intercourse with foreign countries. Such being the case, it would be impossible for the Guangdong authorities to use force rashly against the foreigners in Haojing.

Until 1564, when a large group of Japanese pirates were wiped out, Pang Shangpeng, the Censor in charge of Guangdong Affairs reported to the court in detail about the foreigners' occupation of Haojing for the first time in his "Memorial to the Throne about Keeping a Long Term Coastal Security". He thought that the foreigners in Haojing had to be driven out as soon as possible, otherwise it would be a monstrous disaster. Instead of using force, he advocated that the Deputy Surveillance Commissioner should move to Xiangshan "to show the foreigners the strength and benevolence of the court, and to reward them with bounties, so as to make them dismantle the houses and leave with their ships." In case some foreigners should hesitate and adopt a wait-and-see attitude, it should be reported to the Viceroy of the Two Guangs and the Governor of Guangdong, and they should personally go to Haojing to tell the foreigners the reasons why the foreigners should leave. He said that "we had to see to it that all the foreigners obeyed the order". Afterwards, when their ships came to China again, they should all anchor at the harbours like Langbai and others where they used to go to and trade with Chinese merchants. Due to a very chaotic political situation at the court at that time, Pang Shangpeng's suggestion did not receive much attention from the court.

while the Chinese officials were discussing how to expel the foreigners from Haojing, the Portuguese were also planning how further to open the door of China. Since the early 1560s, they had presented 500 taels of silver a year to the Deputy Surveillance Commissioner, who had the real jurisdictional power over Haojing, to consolidate their status. They called this 500 taels of silver rent for land, but the Deputy Surveillance Commissioner kept it for himself rather than handing it over to the national treasury. In April 1563, when a delegation sent by the Portuguese Viceroy to India and headed by Gil De Goes arrived at Haojing, the Portuguese in Haojing tried to help the delegation to fulfil its task, attempting to make the Ming government allow the Catholic missionaries to do religious work in China, so that they could follow closely on the missionaries' heels to the inland area. They suggested that Goes should disguise himself as an envoy of Malacca requesting to make tribute to China. But the Guangdong authorities found out his real status, and Goes had to admit that he was a Portuguese envoy. The Guangdong authorities thought that "Portuguese" might be a disguised name for "Franks", so they refused to let the delegation go to Beijing to "present tribute".

Hoping for a breakthrough in relations with the Ming Government, in the autumn of 1564, the Portuguese decided to help the Ming government to suppress rioting troops at Zhelin of Chaozhou. The rioters were demanding pay and provisions. Led by Xu Yongtai, the rioters and others approached to Sanmen Sea near the Tiger Gate, posing a serious threat to Canton, where there were only a few troops deployed. So Dieogo Pereira, who had been the chief of the Portuguese in Haojing, sent someone to Canton to tell the Ming general Yu Dayou that they would like to help the Ming government suppress the mutiny.

Yu Dayou sent a subordinate officer to Haojing to discuss the matter. Perira and his countrymen used the opportunity to request permission to send an envoy to pay tribute to the Chinese Emperor and to ask for doing missionary work in China. Yu Dayou refused, saying that as to tribute, it was out of the question, because there was a clear imperial instruction about that already. But he promised "a good reward for the chiefs after success". According to what was recorded by the Chinese officials, the so-called "good reward" was meant to exempt their tax for one year. Pereira had no other choice but to accept Yu Dayou's conditions. Afterwards, under the command of Pereira and the Captain-Major of the Japan Voyage, Luiz de Mello, 300 Portuguese, divided into two teams, embarked on several Chinese warships armed with the Portuguese guns and sailed directly to Sanmen Sea, achieving a quick victory with a surprise attack on the insurgent troops.

After the battle in Sanmen Sea, the Portuguese might have had one year tax holiday. Afterwards, according to the Chinese Materials, the Portuguese, capitalizing on their deeds of helping the Chinese in putting down the rebellion, refused to observe the tax regulations. Their refusal to pay any more customs tax to the Chinese government made the Deputy Surveillance Commissioner, Mo Yi, very angry, and he gave an order in stern terms to suppress them. He sent officers and men to guard the land and water communication line of Haojing, cutting off water and land communications. Yu Dayou hated the Portuguese for unscrupulously capitalizing on their achievements and suggested to Wu Guifang, who was in charge of the military affairs of the two Guangs, that he drive them out of Haojing by force. Yu pointed out:

He thought that it was time to settle the scores with them, so as to create a good environment for the people of Guangdong. Wu Guifang did not at once adopt Yu Dayou's suggestion, but the Portuguese yielded quickly under the suppression of Mo Yi, stopped their confrontation with the Ming government and expressed that they were willing to pay twice as much tax than before. The Guangdong top officials might have taken their bit of contributions into consideration. While refusing their request to go inland to spread Catholicism, the Guangdong authorities allowed them to build a simple meeting hall and a small church for the Madonna. Thus, through helping the Ming government to suppress a mutiny, the Portuguese settlement in Haojing gained the acquiescence of the Guangdong authorities.

In the meantime, the Guangdong authorities' control over Haojing was still very loose. Only Zhou Xing, who assumed the post of Magistrate of Xiangshan in 1567, sternly refused to accept the "routine money" (i.e. bribes) while interrogating and checking the foreign ships, and adopted measures to forbid smuggling by water and land, kidnapping and selling of children and other abuses. In addition, Guangdong authorities only stationed 300 more militiamen in Xiangshan as troops to keep an eye on the foreigners in Haojing. The fact that the Ming government made little effort to control Haojing at that time was the so-called "ancient privilege" constantly borne in mind by the Portuguese two or three centuries later.

The Portuguese stayed at Haojing for nearly another ten years without the formal permission of the Ming government. In 1572 or 1573, by chance, the Portuguese formally paid land rent to the Ming government. According to foreign records, one day when the Deputy Surveillance Commissioner was collecting customs tariff from the Portuguese merchant ships, a Portuguese interpreter called Pedro Goncalves told him that the Portuguese had brought him 500 taels of silver as land rent as well. Because of the presence of other Chinese officials, the Deputy Surveillance Commissioner had to say that he would hand this over to the national treasury. From then on, this money, which lined the pockets of the Deputy Surveillance Commissioner originally, became land rent handed over to the Ming government every year. The fact that the Portuguese formally paid land rent to the Ming government displayed that they acknowledged Haojing as China's territory, while the Chinese authorities' formal acceptance of the land rent paid by the Portuguese and recorded it into Guangdong Fuyi Quanshu (A Complete List of the Taxes and Corvee in Guangdong Province) published in Wanli period (1573-1619) showed that the Chinese authorities formally permitted the Portuguese to lease land and reside.

It was just under such a guiding principle, that officials from Guangdong like Huo Yuxia held that the best policy to cope with the foreigners in Haojing was to make the place a city and appoint officials to rule it like a county. In 1574, the Ming government finally adopted the above mentioned third counter-measure to deal with the foreigners in Haojing. They built a barrier with a gate, which was called "Guan Zha", at the middle of the Lianhuajing, the land throat connecting Haojing and the mainland, to control the foreigners in Haojing. The upper structure of the barrier gate was of the Chinese traditional style, and on the lintel there was a stone carved with three Chinese characters of "Guan Zha Men" (the Barrier Gate). This gate was guarded by officers and soldiers and opened several times a month. The daily necessities supplied to the Portuguese were carried in on the days when it was open. At the same time, the Ming government issued strict orders that the wine and food for the Portuguese had to be supplied within fixed quotas decided by the Guangdong authorities according to the actual number of people living there, and any private supply by profiteers was forbidden.

These measures were the reins to control the Portuguese. Their purpose was to make the Portuguese "depend upon the Ming government's pleasure" and "to rein them through conciliation". In normal times the measures walled them in, making it difficult for them to stay long; whenever they had any illegal actions, the Ming government could choke their throat and cut off the supply of food, to "have them doomed to death without bloodshed". Before long, many Portuguese admitted that in order to obtain daily necessities, they had no choice but to be subordinate to the Chinese. What should be explained is: the Ming government's building the Barrier Gate at the middle of the Lianhuajing was only to use the terrain here; by no means did they intend to make the barrier the boundary of the Portuguese settlement. The area south of the barrier, but north of Haojing including Mongha and other villages, were completely under Chinese sovereignty and outside the Portuguese settlement. The landlords of Mongha had to pay land tax to the Xiangshan Chinese authorities every year.

In 1578, after finally ending decades of harassment and destruction by the Chinese and Japanese pirates, the Ming government allowed the foreign merchants to trade in Canton. At least two reasons accounted for the Ming government's decision: first, it would be more convenient for the Chinese and foreign merchants to do business and more convenient for the Chinese government to keep an eye on them; second, it would reduce the number of Chinese merchants entering Haojing, preventing them from bringing grain, vegetables, cattle, and weapons such as swords, saltpetre and sulphur into Haojing privately to help the Portuguese, and making it easier for the Chinese officials to control the foreigners there.

When the Canton market first reopened, the Chinese officials permitted foreign merchants to come to Canton to trade once a year. Beginning in 1580, the foreigners were allowed to come to Canton twice a year in January and at the end of June, so as to meet the Portuguese arrangement to carry goods to Japan or back to India. Still, to avoid disturbances, the Chinese officials enforced some restrictions on the Portuguese: their carracks were not allowed to sail into the Pearl River; when they went to Canton in Chinese boats, there could be no more than five of them in a boat.

The Ming government's decision to reopen Canton brought unexpected benefits to the Portuguese. The merchants from South-East Asia, who were always afraid of the Portuguese brutality and unreasonableness, went to Canton to trade directly so as not to encounter them. After 1578, Haojing gradually became a commercial port used by the Portuguese only.

To the Portuguese, the next year, 1582, was another year of crucial importance. At the beginning of that year, news came to them that the Spanish King had assumed the monarch of Portugal concurrently the year before, so that the Portugal proper had been reduced to Spain's subordinate. The news set the Portuguese in Haojing on tenterhooks. Even more worrisome, the Chinese court ordered the Viceroy of the Two Guangs Chen Rui to investigate the unauthorized election of a chief judge and practices of Portuguese law in Haojing. It was possible that the Portuguese might be driven out of the settlement. As soon as Chen Rui assumed office, he ordered the local executives in Haojing, i.e. the Captain-Major of the Japan Voyage Aires Goncalves de Miranda and the Catholic bishop Don Leonardo de Saa, to come to Zhaoqing for interrogation. He would question them about why so many foreigners had assembled in Haojing, and why they dared to practice their own country's law on Chinese territory.

After considering the matter carefully again and again, the Portuguese decided to send judge Mattia Penella and a Jesuit missionary, Michele Ruggieri, who were on good terms with the Chinese officials, to represent Miranda and Saa respectively, to cope with the Chinese officials. While meeting Chen Rui, they expressed that in the past, present and future, the Portuguese merchants in Haojing always remained truthful subjects of the Chinese Emperor and always acknowledged the Viceroy his excellency as their protector. They implored the Viceroy to help them and show them benevolence. Then, they sent Chen Rui a number of gifts with a total value surpassing 1,000 gold coins. After receiving such valuable gifts, Chen Rui no longer denounced their unlawful activities, and told them that they could continue to reside in Haojing, but they should "subject to the laws of the (Chinese) Empire". This was the first time the top Chinese local official representing the Ming government clearly permitted the Portuguese to reside in Haojing, laying down a principle for their governance, namely that they had to subject to the laws of the Empire.

Afterwards, in order to carry out the administration over the Portuguese, Chen Rui and his successor Xiao Yan took a series of measures. They regarded the Portuguese as the same as Chinese civilians, and were going to set up a "baojia" system in Haojing. The Portuguese were to abide by the administration of Haifang Tongzhi (the Vice Prefect for Coastal Defence of Canton) and Shibo Tiju (the Maritime Trade Supervisor). They put up high pales at each important crossroads of the town with four Chinese characters on them: "Wei Wei Huai De" (Revering the Authority, Cherishing the Benevolence). Households were divided into left and right sides with 10 sections east and 10 sections west, using the 20 characters from Shang Shu, Luao, i.e. "Ming Wang Shen De, Si Yi Xian Bing, Wu You Yuan Er, Pi Xian Fang Wu, Fu Shi Qi Yong", as names for the sections. (The meaning of the twenty characters was: A wise king would be prudent and rule by virtue, thus all the other countries far and near would contribute their specialties of garments, food, utensils and appliances to him.) The aim was that "each inhabitant would keep an eye on the other, and no evil-doers would be allowed to exist." They also prohibited the Portuguese from keeping weapons or ammunition in the settlement privately, and their houses were thoroughly searched by the local Chinese officials.

In the meantime, the Ming government still had not promised to let the Portuguese lease the land to settle down permanently. Since the lease could be cut off and the Portuguese driven out at any time, they had to keep bribing the Chinese officials with a lot of money. Some Westerners wrote a bit exaggeratedly in 1582 that the Portuguese had to give the new Viceroy of the Two Guangs 100,000 gold coins every three years, which was shared between him and the nobility, so people all believed that the Chinese Emperor would never know that so many foreigners were staying within the Empire. Besides the top local officials, they also had to bribe the officials of the middle level and lower levels. For instance, once a magistrate of Xiangshan County had a deficit of 3,000 taels of silver, the Portuguese made it up for him for fear that he should be replaced by a hostile magistrate. Afterwards, they complained to the King of Portugal about having to spend a huge amount of money on Chinese officials in order to retain this piece of land.

When Chen Rui took up the post as the Viceroy of the Two Guangs, the Portuguese had been residing in Haojing for more than 20 years. After Chen Rui, speaking for the Ming government, permitted them to continue to reside there, it was inevitable that they would remain there for quite a long time. Therefore, beginning around 1582, the Ming government gradually established a special jurisdictional system in administration, judicature and taxation in this special area. In regard to administration, the Ming government continued to have officials guarding the harbours of Haojing. The officials from Xiangshan County such as Chaiguan (bailiff of high rank official), Tidiao (official in charge of internal affairs in non-permanent establishment), Beiwo (official dealing with Japanese pirates) and Xunji (official with patrolling and arresting duties) were stationed in Haojing; the Vice Prefect for Coastal Defence of Canton and the Maritime Trade Supervisor of Guangdong Province were appointed to "restrict" the Portuguese. Whenever important events happened, the top local officials like the Viceroy of the Two Guangs would handle the matter personally.

In the meantime, imitating the "Fanfang" (foreign district) system administering the foreigners residing in Canton in the Tang, Song and Yuan dynasties, and in the light of the Tusi system of appointing a hereditary headman of a minority as the local leader since the Yuan dynasty, the Ming government regarded the Portuguese chief as "Fanzhang" (the head of foreigners) or "Tusi" (chieftain), and appointed him as a low rank Chinese official called "Yimu" (foreign chief) in 1584, making him administer the Portuguese in Haojing settlement and empowering him to a certain degree to administer the Chinese people there as well. The Ming government also established a Yishiting (the building to discuss official business, later the Senate House) as a place for the Chinese officials to read out government decrees to the "Yimu" and for the officials of the two sides to discuss important matters.

In jurisdiction, it was obvious that the Ming government made a reference to the clause concerned in the laws of the Tang dynasty, which stipulated:

That is, when the Portuguese committed offences among themselves, they were allowed to have their own judge and the offender was to be tried and punished according to the Portuguese law. If the accused refused to accept the sentence as final, he could lodge an appeal with the supreme tribunal at Goa, called "Relacao". If a case involved a Chinese person or foreigners other than the Portuguese, no matter whether the Chinese or the non-Portuguese person involved was a plaintiff or defender, it should be tried by the Chinese officials in Haojing. Especially when important cases of homicide involving Chinese people took place, many Chinese officials would go to Haojing to investigate and deal with the cases and bring the criminals back to Canton to be retried and executed according to the Chinese law.

As to taxation, at first the Ming government continued to practice the system of levying 20% of the goods on board as tariff in kind. Because of the foreigners colluding with Chinese profiteers and misreporting cargos, and because of the difficulty in checking, besides the fact that the magistrates going there to collect tax were heavily bribed, only about 20-30% of the goods were usually reported and taxed. Due to the tax leaks, the amount of money illegally gained by the foreigners was considerable, so after 1571, the Vice Prefect for Coastal Defence, the Maritime Trade Supervisor and the Magistrate of Xiangshan County together carried out measurement of the foreign merchant ships and made a judgement, and changed tax paid in kind to tax paid in silver (money).

The tax was fixed according to the size of a ship, and Western ships were divided into nine sizes. Later on, because the foreigners pleaded over and over again, the tax was cut by a 30%. When the taxes in kind were first commuted to silver, the office of Maritime Trade Supervisor of Guangdong collected about 26,000 taels of silver from the Portuguese and other countries' merchant ships per year. In 1599, Eunuch Li Feng, who extorted money for the Emperor Shenzong, arrived in Guangdong, and increased the tax quota for Guangdong to 200,000 taels a year, which forced the Guangdong authorities to add 20,000 taels of silver onto the tax levied from the goods of the foreign merchant ships besides squeezing the common people. In all, the office of Maritime Trade Supervisor collected over 40,000 taels of silver of tax a year. But the Portuguese could not manage to pay this much every year. In the years when there were no ships sailing to Japan, such as in 1611, they only paid 9,000 taels of silver.

In the meantime, the Ming government allowed the Portuguese to set up their own customs to levy tax from the Portuguese merchant ships to be used as funds for their autonomous establishments. The rate of the tariff was not fixed, but was set at the meetings held at the end of each year in accordance with the local financial needs. Usually it was less than 5% . In addition, the Portuguese taxed 3%-4% (later 8%) of the goods to be shipped to Japan, as revenue for the King of Portugal. The Portuguese in Goa were still unsatisfied with that amount, complaining: "His Majesty has no other revenue in this city but that derived from the said voyages, because the King of China, in whose territory it is, has deprived it of all other dues." Thus, in administration, taxation and jurisdiction, the Ming government exercised full national sovereignty over Haojing, while the Portuguese enjoyed quite a large amount of autonomous power, under the premise of accepting the jurisdiction of the Chinese authorities.

At the same time, the Portuguese in the Haojing settlement had an autonomous municipality with a rather democratic atmosphere. The base of this autonomous municipality was the Portuguese who had been in Haojing for a long time, or had married local wives and had children, and regarded this piece of land as their second native place, or who were born and grew up there. The immediate reason for the establishment of an autonomous municipality was Portugal's reduction to a subordinate of Spain in 1580. After the Portuguese in Haojing were forced to declare their loyalty to the King of Spain in 1582, all the local leading citizens assembled to hold a secret meeting in 1583 to prevent the King of Spain from dispatching a governor to this settlement. The conference arranged for the formation of a municipal council, known as "Senado da Camara", in accordance with the Portuguese system of municipal autonomy. The arrangement made the settlement an autonomous city and kept it relatively independent of the King of Spain. On the 10th of April, 1586, the Portuguese Viceroy to India confirmed that the settlement in China was a city with the same "privileges, liberties, honours and procedures" enjoyed by Evora in Portugal.

Having won considerable autonomy, the Portuguese held elections for the Senate every year at first, then every third year. Every free subject of the crown of Portugal born in Haojing, possessing the necessary legal qualifications, had the right to vote for members of the municipal council; free men from other parts of the dominions of Portugal, unless disqualified by the law, could obtain this privilege by marrying and settling at Haojing. The voters chose "electors" every third year, and the Chief Justice selected the six who had the greatest number of votes. The six electors then were divided into three groups, and each group, consisting of two electors, chose 18 individuals and delivered their names to the Chief Justice. He compared the three lists, selected from them and made them into one roll, called the "Pauta" containing candidates to the government for the three next following years. Three lists drawn from "Pauta" (for the candidates of the Senate only had one year term, for a period of three years, three sets of candidates were needed) were sent to Goa. After they were signed by the head of Portuguese in India, sealed and sent back to China, where at a general meeting on the 31st of December, one of the lists would be opened, and the names of the appointees and their posts would be read out by the secretary. Then the new members of the new Senate took the oath and assumed their posts.

The collective body of the Senate was composed of two Judges, three Aldermen and one Procurator. The Aldermen presided over the Senate meeting in alternative and managed the daily routine work according to existing orders and regulations. The judges fulfilled the commands of the Senate, provided they did not violate established rules and laws, and they also decided upon certain civil and criminal cases. The procurator proposed and inspected the necessary repairs of the public buildings, streets, etc., executed the written orders of the Senate, and signed the resolutions with his colleagues. He was, also, the organ of communication of the city with the Chinese officials of the district, and accepted appointments by the Ming government. For a period of time, he concurrently assumed the post as the treasurer and the person in charge of the customs. Since most of the local Portuguese were businessmen without much schooling, for many years the Senate was mostly composed of businessmen, quite a few of whom could not even write their own names, so they often signed documents with a cross. Citizens who had been senators could be denominated as "Almotaces", acting as police officers and justices of peace. Every year, there would be twenty-four "Almotaces", with two on duty each month. When any business of great importance was to be decided, a council of military and ecclesiastical authorities and leading citizens was convened, which was called the "General Council". The Senate established a force of municipal guards, which together with a group of black slaves employed by the customs was responsible for social security. In case of an emergency, for which this force was inadequate, all able-bodied men were to assist in fighting.

After the Senate was established, for the sake of having more autonomy, the Portuguese in Haojing requested that they not be controlled by the Captain-Major of the Japan Voyage any more, and in 1586 they struggled with the Captain-Major of the Japan Voyage about whether he still had the right to rule the Portuguese in Haojing. In order to control this settlement in China, the King of Spain refused to approve Haojing as an autonomous city, and in February 1587, he appointed an Ouvidor (Chief Justice) in charge of administration and justice for the first time, denying administrative and judicial power to the Captain-Major of the Japan Voyage. As to the Capitao de Terra, probably elected to be military commander by the local inhabitants, the King of Spain only allowed him to govern the place together with the Ouvidor when the Captain-Major of the Japan Voyage was away.

The first Ouvidor never assumed his post. In order to compel the Portuguese in Haojing to submit, the second Ouvidor promulgated a series of harsh decrees, which quickly aroused indignation among the citizens, and caused social disorder. The Portuguese Viceroy to India had to appoint a new Ouvidor, and forced all the leading members of the revolt to move to Goa with their dependents. As the Ouvidor's successors frequently clashed with the citizens, in a petition to the King of Portugal the Senate accused the Ouvidors of embezzling others' property and constantly causing trouble. At that time, the Spanish Kingdom was in decline. The King of Spain had to abolish this post once and granted this settlement equal immunities with Evora in 1595, enabling the settlement formally to have the status of a city in Portugal. During this period, according to the wishes of the Senate, an Alderman acted as Ouvidor.

In March 1615, the King of Spain appointed Francisco Lones Carrasco as the local military chief and Ouvidor to replace the Captain-Major of the Japan Voyage, in another attempt to control the settlement. Carrasco arrived at Haojing in August 1616 and the Captain-Major of the Japan Voyage refused to recognize his authority. Moreover, Carrasco committed one mistake after another, increasing the hostility of the local citizens. Then, he was recalled in disgrace at the beginning of 1617. By 1621, the Senate had a sharp dispute with Lopo Sarmento de Carvalho over the trade privilege with China and Japan, which the latter had already bought for three years, so the Senate asked the King of Portugal and the Viceroy to India over and over again to abolish the jurisdiction of the Captain-Major of the Japan Voyage over the place. They wanted a military commander in charge of defence matters only, or complete autonomy of the Senate. But instead of accepting the Senate's request, the Portuguese Viceroy to India appointed Dom Francisco Masarenhas as the first Governor to the settlement, giving him the power to override the Senate, which made the local Portuguese greatly dejected. Although endless conflicts with the successive governors from Goa took place thereafter, the Senate was unable to change the fait accompli. For the next 200 years and more, the co-existence of Governor, Senate, and sometimes Ouvidor was the local autonomous system in the Portuguese settlement in Haojing.

All the Portuguese actions without the authorization from the Chinese government, such as changing Haojing into a city of Portugal, establishing the autonomous municipal council, and appointing a governor in the settlement, violated Chinese sovereignty. Later on, the Ming government found it out and naturally they took some measures to punish the Portuguese. However, generally speaking, in order to keep this foothold in China, especially after Portugal proper was reduced to a subordinate to Spain, the Portuguese took no hostile action towards the Chinese authorities and people while residing in Haojing.

During this period, the Spanish had unbridledly slaughtered the Overseas Chinese in the Southeast Asia; the Dutch and British had wantonly hijacked Chinese merchant ships on the sea, while the Portuguese had not taken similar actions. At the beginning of 1586, the Portuguese missionaries told the Japanese Kanhaku (a top official) Toyotomi Hidekichi that the Portuguese were willing to provide the Japanese with two well-armed carracks to support their launching a war against Korea and China. In return, Toyotomi Hidekichi promised the missionaries that after conquering China he would make all the Japanese people believe in Catholicism, becoming loyal and sincere followers. However, the bottom line was that the Portuguese in Haojing had to rely upon the Chinese for daily necessities, so they would not agree to be involved in a war against China. The Portuguese missionaries' dream come to nothing because Toyotomi was disappointed and decided to drive all the Catholic missionaries out of Japan. It is thus clear that this Portuguese settlement in China to some extent checked the Portuguese, hindering them from rashly taking hostile action against China.

As a Portuguese settlement, Haojing had acquired many new names. At first, the Portuguese called it Amaqua, Amachao, Machoam, Maquao and other similar names. The origin of all these names, according to the Western historic books, was roughly the same. There was a temple to a goddess called "A-ma", i.e. the Goddess of Sea, so they called the place "Macau" ("Macao" in English) afterwards. The full Portuguese name of the place was "the Settlement of the Name of God" (here in fact it should be goddess instead of god) or "the Port of the Name of God (Goddess)". In 1586, when the settlement obtained city status in Portugal, the name of the city was called "City of the Name of God (Goddess) of Macao in China".

In Chinese, the original character "hao" (oyster) contains an element meaning "insect", and with frequent use it was gradually replaced by more graceful homophones embracing "water" or "earth" elements. Literati sometimes used even more refined names such as "Haojiang" (Hao River), "Haohai" (the Sea of Hao) and "Jinghai" (the Sea of Mirror). Because Haojing was the only harbour still in use in Xiangshan County, people also called it Xiangshan Ao (the Harbour of Xiangshan). And purportedly because to the south of Haojing Ao there was Shizimen (the Cross Gate), people called the place "Aomen" by combining the two meaning. Or because the Haojing Ao had Nantai and Beitai, two hills facing each other like a gate (men in Chinese) to Haojing, people called them "Aomen", i.e. the Gate to Haojing Ao.

This name gradually replaced the others, and became the formal name of Haojing in the narrow sense at the end of the Ming dynasty and the beginning of the Qing dynasty. Later on, it was used more broadly to refer to the whole peninsula where Haojing was located. From then on, this place for trade between China and foreign countries was known to all of China as "Aomen" ( Macao in English), and that is how we will refer to it for the remainder of our story.