In 1729, the Yongzheng Emperor sent Jiao Qinian, a special censor, to make an inspection tour in Macao. The next year, the newly appointed Viceroy of the Two Guangs Hao Yulin again seriously studied the situation in Macao. As Macao was far away from the Xiangshan county seat, in the beginning of the Qing dynasty, the Magistrate of Xiangshan County was too busy to take care of Macao; Hao Yulin presented a memorial to the throne asking to follow the Ming precedent and establish an official especially for Macao. He suggested that Xiancheng (the vice magistrate) of Xiangshan County be stationed at Qianshan Stronghold, "with the special responsibility for supervising and administrating the Chinese and foreigners in Macao". With the approval of the central government, the Vice Magistrate of Xiangshan County was stationed at Qianshan in 1731. The Vice Magistrate was a low ranking local civil official of the 8th grade. Because the duty of this Vice Magistrate of Xiangshan was to look after Macao, so he was also called the Vice Magistrate of Macao. From then on, the Qianshan Stronghold, where only military officers had been stationed in the past, now had a civil official as well.

Afterwards, Emida, the next Viceroy of the Two Guangs, decided to strengthen the control over foreign ships coming to China. He thought that foreign merchant ships should not be allowed to sail directly into the Pearl River and to anchor at Huangpu; instead, they should be made to anchor at Macao as before 1686. In the autumn of 1732, he pointed out in his memorial to the throne:

Emida advocated that starting from 1733, other foreign merchant ships should be ordered to anchor at Taipa together with the Portuguese ships. As to the goods to be shipped to and from Canton, they were "to be transported by lighters from Macao".

This proposal was approved by the Yongzheng Emperor. However, it was impractical to transfer all goods by small barges between the Cross Gate and Canton, and the Qing government had to cancel this decision before long. Nonetheless, the Qing government again considered the possibility of moving the spot for foreign trade from Canton to Macao. But the Portuguese authorities in Macao once more rejected the plan out of the consideration of politics, religion and others, which, otherwise, might enable Macao to be prosperous shortly. Foreign merchant ships coming to China anchored at Huangpu as before.

The same year, Emida ordered the Portuguese authorities in Macao to report to Chinese officials the arrival of any foreign ship, and her nationality, destination, weapons and cargo. The Portuguese authorities only took a perfunctory attitude towards this order. The top officials of Guangdong accused the Chinese officials in Macao negligence, and they in turn blamed the intransigence of the Portuguese. Then the Guangdong authorities set up customs offices at Praya Grande and Barra respectively. The one in Barra specialized in checking the Chinese junks anchoring in the Inner Harbour from Fujian and Guangdong, while the one in Praya Grande checked the foreigners going ashore by boat and foreign ships going in and out of the Pearl River. Later on, the one at Praya Grande also levied personal and baggage taxes on foreigners going in and out of Macao, and accepted applications for compradors, interpreters and pilots on behalf of the foreign merchant ships. These measures greatly improved Chinese authorities' management of the Chinese and foreign ships going in and out of Macao.

A few years afterwards, despite the fact that the Portuguese often trafficked in persons, forcing them to be slaves, and smuggled the banned goods in and out the country, on the whole, the area around Macao was peaceful. Starting in 1741, following changes in the international situation, Macao again became a trouble spot. At that time, the war of Austrian succession had already begun, with Britain, Austria and others on one side, and France and Spain on the other. In the second half of that year, a British ship brought a captured Spanish merchant ship first to Macao, and then to Huangpu. The Guangdong Customs Inspector suspected that the Spanish ship had been highjacked, and he prohibited it from leaving Huangpu. The British did not get permission to take the ship away until they had deceived the Chinese officials by saying that because the owner could not pay his debts, they were going to sell the ship through auction in Macao.

Meanwhile, the Dutch colonial authorities in Jawa and Badavia began to persecute and slaughter the Chinese inhabitants there. In July 1741, the Guangdong Customs Inspector issued an order restricting the Dutch merchants to trade in Macao. Soon afterwards, at the request of the Portuguese authorities in Macao, the inspector permitted the Dutch to enter the Pearl River again. With ulterior motives, the Dutch refused to do as the Chinese officials told them to do. Then, the Chinese authorities issued a new order to forbid the Dutch to trade in Macao, and forced them to give in.

In 1742, Commodore Anson, captain of the British warship "Centurion", threatened to break into Canton with force, with the excuse that Chinese officials had refused to allow the warship to sail into the Pearl River, creating a tense atmosphere in the area around Macao. In the summer of the next year, Anson seized another Spanish merchant ship, forced his way into the Tiger Gate and threatened the Viceroy of the Two Guangs. The newly appointed Acting Viceroy of the Two Guangs, Celeng, flew into a rage, impeached Wang Zhang, the commander of the Chinese troops garrisoning the Tiger Gate, and ordered the Magistrate of Dongguang County, Yin Guangren, to investigate and deal with the incident. After interrogating the British crew, Yin Guangren told Celeng "to cut off food supply to starve them, and to keep the craftsmen repairing ships from working to make things difficult for them". Under these circumstances, Anson dared not to make more trouble. He had no choice but to release 299 Spanish prisoners, and let them "return to Spain from Macao at the first opportunity".

In these negotiations held in and near Macao between Chinese officials and foreigners, the Vice Magistrate of Xiangshan County did not play an important role. Therefore, the Surveillance Commissioner of Guangdong Province Pan Enju thought: "the official rank of the Vice Magistrate is too low, the vice magistrate can not supervise and administrate Macao effectively, and can do Macao no good". He suggested that the court follow the precedent of sending a Vice Prefect to administrate and appease the Yao and Li Minorities in Guangdong, by accrediting a Vice Prefect to be responsible for the affairs of the foreigners in Macao, including general supervision, the arrest of bandits and coastal defence. The Acting Viceroy of the Two Guangs, Celeng, supported Pan Enju's suggestion, pointing out:

In order not to increase the number of officials and expenses, he suggested that the Vice Prefect of Zhaoqing Prefecture was to be shifted to Qianshan Stronghold to assume the duty of coastal defence and the administration of the foreigners in Macao concurrently. The original duty of that Vice Prefect, arresting criminals in Zhaoqing Prefecture, could be taken over concurrently by Tongpan (the subprefectural magistrate) of Zhaoqing Prefecture; the Vice Magistrate stationed in Qianshan Stronghold was to be moved to Macao with a special duty of supervising and investigating all the lawsuit-cases of the Chinese and foreigners in Macao.

In the early winter of 1743, before the Qing government had made a decision about Celeng's memorial, a major case of homicide happened in Macao. On December 3, 1743, a Chinese called Chen Huiqian doing business in Macao got drunk, and quarrelled and fought with a Portuguese on his way home; he was killed by the Portuguese with a dagger. After examining the corpse and interrogating the murderer, the Chinese officials of Xiangshan County reported the case in detail to the Viceroy and the Governor of Guangdong. The Xiangshan officials also reported secretly that foreigners in Macao had never been tried outside of Macao when they committed crimes. So it was the same with this case. The Portuguese authorities refused to hand over the criminal to the Chinese authorities and escort him to Canton. As Celeng feared that the Xiangshan local authorities would be too lenient, in a written instruction on the file of the case, he ordered Wang Zhizheng, the Magistrate of Xiangshan County, "to have the murderer tried and escorted according to the normal legal practice of China".

Wang Zhizheng urged the Portuguese authorities in Macao over and over again to hand over the murderer, but the Portuguese authorities refused. They presented a note to the Guangdong authorities, arguing that in the past hundred years Portuguese who violated the law had all been punished in Macao, and had never been handed over to the Chinese authorities in Canton. The Portuguese who had killed Chen Huiqian should be punished according to the Chinese law. But if they should hand over this murderer to the Chinese officials, they would violate the ban that had been imposed by the Portuguese monarch and would be severely punished by their government. Therefore, the Portuguese authorities asked the Chinese officials to allow them to handle the case in Macao.

After discussing the case over and over again, Celeng and his assistants thought that if the Chinese officials had gone into Macao, searched for the culprit directly and gotten him arrested, it might have caused misgivings and other troubles among the foreigners. So they decided to approve the request of the Portuguese, and gave them special treatment in legal field once more. They ordered the Prefect of Canton and the Magistrate of Xiangshan County to go to Macao to inform the Portuguese authorities that according to the chinese law, the criminal had to be hanged. A few days later, these Chinese officials together with their Portuguese counterparts, put the criminal to death in Macao. The process was witnessed by the relatives of the murdered man.

After finishing this case, in a memorial to the throne, Celeng said that when the "uncivilized foreigners" living in Macao committed capital crimes, if they were made to go through the same procedures as the people in China's interior, i.e. having them arrested, sent under escort and tried and having their crimes confessed, their countrymen would not be willing to obey the Chinese order. In the meantime, the local Chinese officials were also afraid that they themselves might be punished and their promotion in the future might be hindered, in case they should fail to force foreigners to hand over the criminals. So the local Chinese officials often acted fraudulently in colluding with the foreigners in Macao. Sometimes these officials did not report a case to Canton at all and let it end up in nothing definite. Sometimes they changed the plot of a case, turning the serious crimes into negligible offences. As a result, even if a Portuguese murderer should be executed, it was quite possible that he might be let off easy. Therefore, Celeng asked the court to allow those Portuguese who committed capital crimes and deserved death penalty to be executed in Macao by the Chinese officials and the Portuguese officials together rather than handed them over to the Chinese authorities.

The Qing government responded:

In 1774, the Qianlong Emperor issued an order stipulating that henceforward if there was a foreigner in Macao who had murdered a Chinese inhabitant and deserved the death penalty, the Magistrate of Xiangshan County had to investigate carefully and report clearly to the Viceroy of the Two Guangs and the Governor of Guangdong, who had to check it carefully. While the Viceroy and Governor gave a factual report to the court and let the Ministry of Justice put it on record, they were to order the Chinese local officials together with the Portuguese officials to execute the criminal in Macao. From then on, it was clearly stipulated in Qing law that Portuguese capital criminals need not be sent to the interior for execution.

This incident speeded up the steps of the Qing government's stationing a vice prefect for coastal defence at Qianshan Stronghold. At the end of 1743, as requested by Celeng and Pan Enju in their memorials to the throne, the Qing government turned the Vice Prefect of Zhaoqing Prefecture, a fifth grade official, into "Vice Prefect for Coastal Defence of Canton Prefecture", also called "Vice Prefect for Military and Civil Affairs" or "Vice Prefect of Macao", subordinate to the Prefect of Canton and stationed him at Qianshan Stronghold. The area under the jurisdiction of the Vice Prefect included the four counties of Panyu, Dongguan, Shunde and Xiangshan. His duty was to supervise the Chinese and foreigners in Macao, check foreign ships sailing in and out of Macao and punish street fighting, robbery, trafficking in persons, smuggling of banned goods and so on. In order to honor him, the Qing government provided him with an independent coastal defence battalion directly subordinate to the regiment commanded by the Viceroy of the Two Guangs and consisting of two assistant company commander, one hundred infantrymen and cavalrymen, four boats and ten horses. The Vice Magistrate of Xiangshan County, who was originally stationed at Qianshan Stronghold, and now as a subordinate of the Vice Prefect, was to be moved to Macao. One of his duties was to report all the cases between the Chinese and foreigners in Macao to the Vice Prefect in detail.

At the same time, as the post of the Vice Prefect was very important, and only those who were familiar with local conditions would be competent, the Qing government changed the nomination proceeding. The official of the post was now to be selected by the Viceroy of the Two Guangs and the Governor of Guangdong from the officials under them, instead of being nominated by the Ministry of Official Personnel in Beijing.

On hearing the news, Celeng chose Yin Guangren as the first Vice Prefect for Coastal Defence before the formal imperial order reached Canton. He instructed Yin to make a survey and select a place to build the Vice Magistrate office. Upon receiving the imperial order in the early summer, in 1744, Yin Guangren went to Qianshan Stronghold and assumed his post right away. However, the original plan to move of the Vice Magistrate to Macao failed, because the Portuguese strongly opposed the stationing of another Chinese official in Macao. They blocked the approaches of the harbours with debris and prepared to resist the attack of Chinese troops. If they failed, the Portuguese were even prepared to give up Macao. The Guangdong authorities then did not intend to create an incident by making all the foreigners leave Macao rashly, so they quietly changed the original formula. They moved the Vice Magistrate of Xiangshan County to Mongha, south of the Barrier Gate and north of Macao city wall.

With a customs official stationed at Macao, the Vice Magistrate of Xiangshan County at Mongha, military and civil officials like the Vice Prefect for Coastal Defence at Qianshan Stronghold, and with the army and naval force from Xiangshan Brigade and the Tiger Gate Brigade patrolling and garrisoning day and night in the surrounding area of Macao, the Qing government's jurisdiction over Macao reached a high point in 1744.

In view of the fact that the Xiangshan County authorities in the past did not have strict control over Macao, when assuming his post, Yin Guangren, the first Vice Prefect for Coastal Defence, adopted seven measures to strengthen China's control over Macao. The measures fall over four aspects:

First, strengthening the checking of the foreign merchant ships going in and out of the Pearl River and Macao. The foreign merchant ships had to anchor at places near Macao before sailing into the Tiger Gate, and the office of Vice Prefect for Coastal Defence would send pilots for them. Before going out, the foreign captains had to report to the office and wait for inspection. The pilots had to be screened carefully; they would get the waist tablets and certificates after they had signed undertakings and had themselves guaranteed. If anyone dared to disguise himself as a pilot, he would get a very severe punishment.

Second, strengthening the administration over the Chinese peddlers and craftsmen in Macao. The Vice Magistrate of Xiangshan County had to organize these peddlers into the bao-jia system. The peddlers were only allowed to put up some sheds to sell goods at the open ground outside of the city wall of Macao. Neither the peddlar himself nor his dependents were allowed to go into Macao without permission. As to the inland craftsmen who repaired ships and houses for the Portuguese, the Vice Magistrate had to check and register them, organize them into bao-jia and make them sign undertakings and have them mutually guaranteed in an interlocked way. If there were unworthy craftsmen who should instigate or lure "foreigners" to do evil, they themselves and the members of the same jia would all be punished.

Third, strengthening control over the Portuguese in Macao. When the Portuguese authorities in Macao wanted to deliver a report to the top officials of Guangdong, they had to hand it to the Vice Magistrate of Xiangshan County first; the Vice Magistrate then passed it to the Vice Prefect for Coastal Defence, and the Vice Prefect would relay it to his superiors. The Portuguese were not allowed to pass their reports to the top officials in Guangdong through merchants familiar to them. When the foreigners wanted to get their ships repaired in Macao, they had to report the size of their ships and the names of the craftsmen they have hired to the office of the Vice Prefect. The craftsmen could buy nails needed from Canton, and if there were surplus nails, they had to be handed over to the Chinese authorities to be stored there. If the foreigner or the Chinese craftsmen overbought them and intended to bring them abroad secretly, strict interrogation and punishment would be carried out according to law.

Fourth, coordinating the patrol and defence tasks of the Chinese troops stationed around Macao. When the Vice Prefect for Coastal Defence sent troops to suppress the "foreign merchants" and check traitors and bandits, he should seek the cooperation of the troops stationed in Xiangshan and at the Tiger Gate. When the officers of the Xiangshan Brigadeand the Tiger Gate Brigadedealt with foreign affairs, merchant ships and fishing boats going into and out of Macao, and scheduling troop parading, they had to report to their superior as well as the Vice Prefect.

Afterwards, Yin Guangren also laid down detailed regulations banning trafficking in persons by Chinese and foreigners in Macao, set standards for how to try and sentence Portuguese criminals, restated the ban forbidding Chinese to become Catholics and ordered the Chinese converts in Macao to "give themselves up and return to their native places" within one year. In the wake of the establishment of the Vice Prefect for Coastal Defence, the Qing government's control over Macao was quickly strengthened.

Meanwhile, the Qing government strengthened its control over the sea around Macao as well. In the spring of 1744, when Yin Guangren went to Macao to set up the office of the Vice Magistrate, he found out that three Spanish ships had sailed near to the Cross Gate. He made an inquiry and discovered that these Spaniards were the former prisoners whom the British Commodore Anson had been forced to release after the Chinese officials' intervention the previous year. The Spanish commander said that their purpose in coming to China was to deliver a letter to express gratitude to China, However, Yin quickly discerned their real aim. It was to revenge upon the British. Yin Guangren thought that "it would inevitably cause trouble, if the foreigners should fight each other in the waters near China". So he hurriedly sent the Spanish letter expressing gratitude and his own secret report to Celeng, the Viceroy of the Two Guangs. Celeng immediately dispatched Yin Guangren with instructions to persuade the Spaniards to leave China's waters peacefully. Convinced by Yin, the Spanish left the Cross Gate on May 19, 1744. An armed conflict near Macao was averted by Chinese officials.

In the summer of 1745, six British and Dutch warships arrived at the Cross Gate. The British on board said that they were on the way to Japan to do business, but in fact, they were attempting to intercept the Spanish and French merchant ships coming to China. Yin Guangren reported to the top officials of Guangdong at once and asked them to assemble and deploy naval patrols and put all the armed forces on alert. On September 4, when a French merchant ship approached Macao, all the British and Dutch warships hoisted their sails, weighed anchor, and got ready to intercept the ship. The French asked for emergency aid from the Chinese officials, Yin Guangren and Lin Song, the Commander of Xiangshan Brigade lined patrol ships up in a row crosscutting the sea-lane, and sent a Portuguese official in a small boat to the British and Dutch ships. The Portuguese official solemnly declared that China's law was strict and impartial, forbading foreigners to plunder merchant ships of other countries in Chinese territorial waters; if they should hurt the French, the British and Dutch persons in Huangpu would have to pay with their lives; if they should loot the French, their goods in the Chinese brokers' hands would be taken as compensation. The British and the Dutch did not dare to act rashly, and the French merchant ships seized the opportunity and sailed into the Tiger Gate. Another imminent bloody incident was successfully warded off. These actions of Yin Guangren prevented Western ships from fighting each other in Chinese territorial waters, and maintained the stability of the Macao area. He was praised by the Qing government and the top officials of Guangdong.

With the Vice Magistrate of Xiangshan County stationed at Mongha and Vice Prefect for Coastal Defence at Qianshan Stronghold, the Qing government's new system of control over Macao took shape. The Vice Magistrate, the Vice Prefect, the Prefect of Canton, then the Surveillance Commissioner, the Administration Commissioner, the Governor of Guangdong and the Viceroy of the Two Guangs composed the jurisdiction layers of administration and justice over Macao. When major events took place, the Viceroy of the Two Guangs and the Governor of Guangdong had to report to the court and deal with them according to the instructions of the emperor. The Qing government's control over Macao entered the strictest period after the establishment of this system. However, some Chinese officials thought it unnecessary to rule the foreigners attached to China like the common Chinese people, because it would be too harsh on the foreigners and too complicated to put into practice. Therefore, the Qing government only had the Chinese inhabitants in Macao organized into bao-jia; it did not register all the Portuguese houses in Macao, and establish Bao-Jia system among the Portuguese, or forced them to pay poll tax as the Ming dynasty had done. So the measures taken in the period were more lenient than in the Ming period.

Following the establishment of the Vice Magistrate and the Vice Prefect and the strengthening of control over Macao, Chinese officials inspected Macao frequently, Chinese scholars visited Macao one after another, and more books about Macao became available. In 1745, Xue Wen, the General Surveillance Circuit Intendant of Canton, Nanxiong, Shaoguan and Lianzhou prefectures, went to Macao to inspect. He wrote an essay titled "Notes on Macao", which introduced Macao briefly. In 1750, the Acting Magistrate of Xiangshan County, Zhang Zhentao, wrote "Aomen Tushuo" (Macao Illustration) and some other articles about the city after doing some research. In 1751, Yin Guangren and Zhang Rulin, the successor to Yin as the Vice Prefect, cooperated on Aomen Jilue (The Brief Records of Macao) in two volumes. The work ran to 60,000 Chinese characters and was divided into three chapters of "Situation", "Defence" and "Foreigners in Macao". It also contained 21 illustrations. In 1784, the Prefect of Canton Zhang Daoyuan, who went to Macao on business, wrote a poem and had it carved on a rock at Barra. Later on, scholars going to Macao often followed him, and the custom lasted 200 years. The rock carvings at Barra become an important cultural relic. In addition, scholars from Xiangshan like Li Xialing and Deng Gu also wrote books such as Aomen Shu (A Narration of Macao), Aomen Youcao (A Freely-written Travel Notes of Macao) and others.

Some of these poems and articles spread inland, deepening the Qing officials and inland people's understanding of Macao. In Particular, the Aomen Jilue (A Brief Records of Macao), as the first monograph about Macao introducing in detail its geography, history, economy and culture and the customs of the Portuguese residing in Macao, attracted people's attention as soon as it was published, and was soon included in the Siku Quanshu. Afterwards, Aomen Jilue was reprinted by governmental and non-governmental publishing houses again and again, and was widely read.

When the Qing government stationed officials for Macao, the Portuguese made some adjustments in the Senate system of Macao too. Because the procurator holding the post of treasurer concurrently was liable to embezzle public money, the Portuguese Viceroy to India issued an order in 1738 that the procurator should not hold that post concurrently. However, the Macao Senate stated that before receiving an order from the monarch, they could not obey this instruction. The Portuguese Viceroy to India had to order the Governor of Macao to supervise the implementation of that instruction. The instruction was not formalized until 1744, when the monarch of Portugal approved it. Afterwards, in the triennial Senate election, besides the Senate members, three treasurers were elected, each for one year term. They were not Senators, but could attend Senate meeting as nonvoting participants. The Senate system that had lasted nearly 200 years and the system of Chinese control over Macao were both adapted to meet changing needs.

After the Qing government had strengthened its control over Macao, many conflicts took place between the Guangdong authorities and the Portuguese authorities in Macao. One of the results of these conflicts was the Agreement of Aftermath Arrangements Concerning the Foreigners in Macao.

The first conflict originated from the sealing off the Seminary of Santo Amparo, which could have been avoided. This monastery had been built near the St. Paul's Church in 1679 and rebuilt in 1719 with funds collected by Jesuits from the Chinese followers. The church was used to spread Catholicism among the Chinese inhabitants and to train Chinese clergy; it was called "Tangren Temple" (Chinese Temple) or "Jinjiao Temple" (The Converting Temple) by the Chinese inhabitants. In the years immediately after the construction of this monastery, the Chinese authorities did not intend to ban it.

In the early period of the 18th century, in spite of strong opposition from the Jesuits, the Vatican started the "Rites Controversy". As a result, the Qing government forbade the Westerners to do missionary work in China. In 1724, the Qing government drove most of the missionaries from China's interior into Macao, and ordered them to return home by ships from Macao. Some of the expelled missionaries defied the order, continuing their work in Macao. Since Catholicism had been prohibited in China's interior, quite a few Chinese were christened in Macao. Among them, some had been living in Macao for a long time, and some were converts from the interior. The situation aroused the Guangdong authorities' concern. After the first Vice Prefect for Coastal Defence, Yin Guangren, adopted some measures to tighten control over Macao in 1744, the number of people who came to Macao to be christened decreased.

In 1746, because the Western missionaries preached the Gospel openly in Fujian, the Qianlong Emperor again banned Catholicism. The Magistrate of Xiangshan County, Zhang Rulin, thought that the foreigners in Macao might be allowed to build their temples and believe in their religion, but the conversion of Chinese was definitely included in the ban and had to be prohibited. Through a secret investigation, he found nineteen Chinese Catholics headed by Mr. Lin and Zhou Shilian. Under the cover of practicing medicine, Mr. Lin, who had lived in the Seminary of Santo Amparo for a long time, led his son and followers in systematic missionary activities. Zhou Shilian, who was an owner of a large merchant ship and had married a foreign woman, earned his living through ocean-going trade. When Zhang Rulin posted a notice banning Catholicism among the Chinese, Lin and others fled at once, and the monastery was guarded by the Portuguese soldiers. Zhang Rulin considered that stopping the source was better than blocking the current, so he reported to the Viceroy and the Governor and asked them to dismantle or seal off the monastery. When the Viceroy and the Governor decided that it had to be sealed off and closely watched, Zhang Rulin sent Gu Lin, an important official under him, and Gu Song, the Vice Magistrate of Xiangshan County and Cai Taiguan and Cai Baoguan, rich businessmen in Macao, to seal off the monastery.

The Senate of Macao were prepared to obey the Chinese authorities' order at first place, but Bishop Hilario de Santa Rosa, supported by the whole ecclesiastical community, instigated the Senate to resist the order. The Senate presented a letter to Gu Lin, saying that it was misleading for this monastery to be called "Tangren Temple"; it was by no means built by the Chinese. The Senate also claimed that because the Portuguese rented Macao and built the churches, the Chinese authorities should not seal them up; if they did so, that was equal to annihilating their religion, and they would rather go home.

Zhang Rulin wrote a tit-for-tat reply, and had Gu Lin read it before the Portuguese authorities in Macao. The reply reads:

Of course the Portuguese would not make the decision to "abandon Macao". On March 30, when Zhang Rulin himself went to Macao to seal up the "Tangren Temple", they had to meet and see him off cautiously, and did not resist any longer.

Not long after the sealing up of the "Tangren Temple", Antonio Jose Telles de Menezes, a fierce and arrogant bastard, assumed the Governorship of Macao. Menezes claimed that he would carry out reform in Macao only one weak after assuming the post. He ordered a gibbet and pulley to be erected on the wall of the Citadel for the enforcement of the military punishment of strappado. Whenever he went in and out of the Citadel, he was escorted by twelve fully-armed soldiers to show his power. Not only the Portuguese, but even the Chinese inhabitants, were afraid of him, with the latter calling him by the nickname "tiger". With the assumption of the governorship of Macao by such a colonialist, conflicts between the Chinese and Portuguese officials further sharpened.

The first clash was entirely provoked by Menezes. At that time, the Chinese customs officials had built a new fence for the Customs House in Macao. Menezes sent his slaves to pull it down. The Chinese officials were angry, and demanded that the Portuguese authorities in Macao rebuild it. Despite the best efforts of the Senate to make him see reason, Menezes drivelled that Macao was a Portuguese colony by permission of the Chinese emperor, claiming that "wherever the Portuguese standard flew, it could not be lowered without shedding blood". Things went from bad to worse, and the Chinese officials were going to report the incident to the Viceroy of the Two Guangs. The Senate knew how serious the situation was. Defying Menezes' objection, they apologized to the Chinese officials in many ways, presenting valuable gifts and rebuilding the fence for the Chinese customs with strong materials. Thus, this incident did not cause more serious consequences.

However, an even more severe clash happened in June, 1748. One evening, two Portuguese soldiers took on patrol arrested two Chinese suspects, Li Tingfu and Jian Yaer. On the way to the Citadel, perhaps because they had attempted to escape, the Portuguese soldiers beat them to death. Menezes, who had seen the incident, and had secretly put the two corpses into jars and sunk them in the sea, ordered a flat denial of the incident to be made to all enquiries. A Macaonese called Franco reported the crime to the Chinese officials, so the Vice Prefect for Coastal Defence, Zhang Rulin, and others once again asked the Portuguese authorities in Macao to hand over the corpse and the murderers. Menezes not only refused, but would not even let Chinese officials question the murderers.

The top officials of Guangdong ordered the Barrier Gate closed, cut off the supplying of food to Macao, and ordered the Chinese inhabitants to leave Macao. In this situation, Menezes consolidated defence in Macao, attempting to put up a desperate resistance. But without food, the Portuguese inhabitants, including Senators, missionaries, nuns and others, were all dissatisfied with Menezes' rude and unreasonable behaviour; they called the inhabitants in Macao to provide testimony for the case. As a result, three persons came out as eye witnesses, and thirty-three persons said that they had heard about it. Menezes could no longer deny the fact openly, and had to let Zhang Rulin and his assistants interrogate the two guilty soldiers. The Chinese officials only had one chance to interrogate the two Portuguese soldiers, because Menezes hurriedly shipped them off to Timor with the excuse of coping with an emergency, defying the objections of the Senate.

After the two murderers' departure, many Portuguese merchants and monks tried to bribe Zhang Rulin to minimize the incident. One Portuguese businessman alone took out thirty gold bars. Since the criminals had already left Macao and he was well bribed, Zhang mitigated the case from a capital crime to a minor offence. He lied to the Governor of Guangdong, Yue Jun, that Li Tingfu and Jian Yaer had been killed and their corpses thrown away because they had entered the homes of Portuguese residents at night. According to The Law of the Great Qing, "All those who entered others' homes at night without just cause could be regarded as bandits and thieves", so "the victims' killing them on the spot should not be regarded as a crime". The two Portuguese soldiers were considered as only having committed the offence of throwing the corpses away, which was not a capital crime. According to the Chinese law, it seemed appropriate to sentence them to be banished to a remote place like Timor forever. After three weeks' closing down of the Barrier Gate, to people's surprise, this case was hastily wound up.

The Qianlong Emperor was quite dissatisfied that a major case of homicide had ended this way. He pointed out:

On November of 23, 1748, he announced in an imperial instruction:

He pointed out that if these criminals were only exiled, they would become even unruly and it was unfair to the dead:

Therefore, he instructed:

Although the bribery committed by Zhang Rulin was not exposed, since the Governor of Guangdong, his superior, Yue Jun, had been punished because of him, Zhang's error was even more serious. Zhang was accused, down-graded, and dismissed from office soon afterwards.

After this confrontation with the Chinese officials, Menezes' attitude towards the Portuguese inhabitants was even more cruel and unreasonable. He even retaliated against the Portuguese inhabitants and officials who were discontented with what he did. First, he arrested the informer Franco and subjected him to a rigorous punishment on the strappado that ruined his health. Soon afterwards, because the Ouvidor, Antonio Pereira Braga, had neglected his duty, and had defied Menezes' orders, Menezes lured Braga into the Citadel. At first, Menezes was refined and courteous towards Braga, begging him to relax all formality by removing his coat and sword. When Braga was disarmed, Menezes upbraided Braga with venomous words for his delinquency, and then ordered his slaves to give the Ouvidor a severe thrashing. Finally, Menezes gave the coat and sword back to Braga, treated him with every consideration, and regaled him with a glass of brandy as if nothing had ever happened. Later on, he served several Portuguese officials who had offended him in a similar fashion. At the mention of a special "treat" in the Governor's house, the Portuguese in Macao felt like a nightmare. Those who were "invited" by the Governor were apt to seek refuge in one of the convents, or even flee to Canton.

Menezes' wanton behaviour soon aroused the anger of the Portuguese officials and inhabitants. Manuel Vicente Rosa, one of the wealthiest and most influential citizens in Macao, and the Senators, engineered an action to drive Menezes out. They suggested that the Chinese officials write the Portuguese Viceroy to India, denouncing Menezes' crimes. In April 1749, Rosa and his confederates also presented an appeal written by the inhabitants in Macao to the Portuguese Viceroy to India, asking him to depose Menezes. It was said that in order to win the Viceroy over, Rosa sent him a present of gold oranges. Through efforts of Rosa's friends in Goa, the Viceroy dismissed Menezes and appointed Captain Joao Manuel de Mello as the new Governor of Macao. He also ordered Dr. Menezes Pereira de Silva, Judge of the High Court of Goa, to go to Macao immediately to investigate the accusations against the former governor of Macao.

Pereira arrived at Macao in August, 1749. At that time, the Guangdong top officials had sent the dismissed Zhang Rulin and the Magistrate of Xiangshan County, Bao Yu, to take part in the investigation of the Menezes case. The Portuguese inhabitants were excited to see the Judge sent over by Goa, and more than eighty people accused Menezes of his crimes one after another. After being tried and sentenced, this savage "tiger" was paraded through the streets to expose him before the public, and escorted back to Goa on January 27, 1750. With the common efforts of the Portuguese and Chinese officials and people, the scourge of Macao was finally removed.

Before Pereira sent Menezes back to Goa under escort, Zhang Rulin, Bao Yu and Pereira discussed how to deal with the aftermath of the problem. The Agreement of Aftermath Arrangements Concerning the Foreigners In Macao was drafted by Zhang Rulin included twelve articles, with all but one accepted by Pereira. The only exception was the article of "it is not permitted to teach or induce Chinese to become converts", which Pereira opposed over and over again. At the insistence of the chinese officials, the article was retained. After the Viceroy and Governor of Guangdong approved the "Convention", it was carved on four stones in both Chinese and Portuguese. Originally, the stones were to be erected in a public square; later on, at the request of the Portuguese, the tablets carved in Portuguese were placed in the Senate House, and the ones in Chinese were erected in front of the office of Vice Magistrate of Xiangshan County. Because of translation and other reasons, the words of stone tablets with the two languages was not wholly identical. In particular, the Portuguese one omitted Article 12, which prohibited the spread of Catholicism among the Chinese inhabitants.

The twelve articles of the Agreement on the Aftermath Arrangements Concerning the Foreigners in Macao, or "Convention" or "Pact", as it was called by the Portuguese, run as follows:

This Agreement of Aftermath Arrangement Concerning the Foreigners in Macao was a local decree that had to be obeyed by both the Portuguese and Chinese inhabitants. Some of the articles in the agreements reiterated old regulations, and others were new ones laid down according to the actual situation at the time, including some quite important new measures. For instance, Article VII stipulated that the Chinese authorities would investigate and register the existing houses and churches in Macao one by one, and thereafter the Portuguese were only allowed to repair the old houses, but not to build new ones. This provision showed that Macao was a Chinese territory under the Qing government's jurisdiction and the Portuguese were only renters. Articles IV, VI and IX stipulated that when the Chinese inhabitants in Macao committed crimes, the Portuguese had to ask the Chinese officials to look into the case, and the Portuguese were not allowed to arrest and beat up the Chinese suspects privately without permission. This showed that the jurisdiction over the Chinese inhabitants was in the hands of the Chinese authorities, and the Portuguese authorities were not entitled to it. Article VI, VII, VIII, IX, X, XI and XII stipulated that the Portuguese violating Chinese law would be punished according to the Chinese law; if the Portuguese officials neglected their supervisory duties, they would be investigated and punished too, which showed that the Portuguese inhabitants and officials in China were also subject to Chinese jurisdiction; all they had were only certain autonomous rights in administration and justice.

These articles basically laid down the Qing government's policy implemented in Macao later on; they mostly were of positive significance to China's safeguarding its sovereignty over Macao and to China's strengthening of its jurisdiction in Macao. However, as one of the motivations of the Guangdong authorities in laying down these regulations was to restrict the development of the area resided by foreigners, and to prevent troubles in the future, a few articles, such as the ban on new houses, hurt the development of Macao.

What is worth pointing out is that the Portuguese version of this "Agreement" is very simple and brief, and not entirely identical with the Chinese version. For instance, the Article IV in Portuguese has the stipulation that "No Chinese shall go out at night after nine o'clock", but the Chinese version has no such restriction at all. At that time, the exchange of documents between Chinese authorities and Portuguese authorities in Macao used documents in Chinese only. Although the Portuguese once tried to use two versions i.e. Chinese and Portuguese at the same time, it was flatly refused by the Chinese authorities. As the Portuguese then was in no position to resist the order of the Chinese authorities, no doubt the Chinese version of the "Agreement" is the standardized document.

The stipulations in Agreement of Aftermath Arrangement Concerning Foreigners in Macao were a heavy blow to those Portuguese who regarded Macao as their colony. Meanwhile, some stipulations such as forbidding the Portuguese to go beyond Macao were too harsh. Therefore, a group of Portuguese thought that it was the Guangdong authorities rather than the Qianlong Emperor that had laid down the "Convention". So they sent the Macao Bishop to Lisbon, asking the monarch to send an ambassador to China to negotiate. The Portuguese ambassador Francisco Xavier Assis Pacheco reached Macao in the winter of 1752 and went to Beijing soon afterwards. He spent 22,000 taels of silver, but obtained nothing. The Portuguese had no choice, but to abide by the "Convention".

In the later half of the 18th century, just when the Qing government was strengthening its jurisdiction over Macao, influenced by Portuguese domestic politics, the Portuguese authorities in Macao were engaged in a reform. This reform lasted several years, did not bring many changes to Macao and ended in failure finally.

At the 1750s, the reforms initiated by Marquis of Pombal, a favourite of King Jose I, were being carried out in Portugal. As the reforms were just getting off the ground, they had not yet affected Macao faraway. Meanwhile, the Macaonese, restricted by the convention of twelve articles, were acting so circumspect that many Chinese officials approved of the way of their1 "cautiously abiding by the law".

The Portuguese in Macao had adopted a cautious approach because they were still in a very difficult situation economically. And drawing a lesson from Menezes, a number of knowledgeable Portuguese and their representatives in the Senate acknowledged once more that avoiding confrontation with the Chinese authorities was the correct strategy for maintaining Portuguese rights and interests in Macao. They tied to the good side of the Chinese authorities. At that time, more Portuguese were leaving Macao than were entering. The proportion of Portuguese in the Macao population, especially Portuguese men, decreased steadily, while the proportion of Eurasians and Chinese inhabitants increased. In 1749, the Chinese and Portuguese officials had reached an agreement that only seventy Chinese craftsmen, ten butchers, four blacksmiths and one hundred porters were allowed to reside in Macao, while other Chinese businessmen had to come in the morning and leave at night. In reality, the stipulation had not prevented Chinese from residing in Macao. Following the gradual reduction of the Portuguese population, many empty houses were rented to Chinese. Because they lacked the capital to purchase goods, the Portuguese in Macao had to lease their merchant ships to other foreign merchants. Quite a few Portuguese males even degenerated to beggars or bandits, for they were unwilling to be craftsmen or farmers. Quite a few Portuguese females became beggars, and some were even reduced to prostitution.

Zhang Zhentao, who assumed the post of Acting Magistrate of Xiangshan County in 1750, reflected the hardships of the Portuguese in his writings: There were many Portuguese women and few men in Macao; many Portuguese men had gone away with capital and not returned for years; Portuguese women were often abducted by some lawless crafty Chinese; those Portuguese who had accumulated some capital and stayed in Macao were suffering from theft and looting. Some Chinese brokers were in arrears with payments for Portuguese goods shipped to the interior of China, and the Portuguese merchants often had no way to appeal and suffered from debts being repudiated by the Chinese brokers. Zhang Zhentao also pointed out that because the Portuguese were fewer, poorer and weaker than before, "they could no longer ride roughshod flagrantly in defiance of death".

Of course, the Portuguese violated some Qing laws on the sly. Especially blame worthy was their collusion with Spaniards in evading China's tariffs. When a Spanish merchant ship from the Philippines came to Macao, the Portuguese would disguise it as one of the twenty-five Macao merchant ships to deceive Chinese customs and obtain preferential treatment in "ship fee" reduction and tariff exemption for goods. The Spaniards, paid ship fee and goods duties to the Portuguese customs, sharing the extra benefits with the Portuguese. Since Chinese customs only levied 3,000 to 4,000 taels of silver in "ship fees" from Portuguese ships, but 20,000 and 30,000 taels from merchant ships from other countries, each deception meant a loss of at least 10,000 taels of silver to the Chinese government. The Chinese officials noticed the problem, but could not prove anything. Later on, the number of Macao merchant ships gradually decreased, and the Chinese authorities simply did the Portuguese a favour by allowing the ships from the Philippines to fill the vacancy of Macaonese ships. But the ships from Spain proper still had to sail to Huangpu to be measured by the Guangdong Customs and to pay full fees and taxes; they could not enjoy the preferential treatment accorded the Portuguese ships in Macao.

In 1752, following the final abolition of the harmful system of royal monopoly of trade by Marquis of Pombal, the reform tide in Portugal began to pound Macao. That year, some Portuguese merchants from Lisbon came to Macao. It was a grand occasion, not seen for years. Before long, although the plan to establish a Portuguese East India Company aborted, the Portuguese in Macao now could go anywhere to trade freely.

At that time, China was already engaged in direct trade on land and the sea with Western countries like Britain, France, the Netherlands and Russia, and the Portuguese did not have many advantages in the trade with China. In order to let Macao provide more revenue for the King of Portugal, and in the light of the fact that Chinese tea was welcome in Europe and America, Marquis of Pombal actively backed the Portuguese in Macao in the development of the tea trade. But the British merchants already controlled the trade and they hindered the Portuguese in their attempting to make Macao a centre for the export of Chinese tea. Nevertheless, trade in Macao picked up; the living standards of the Macaonese improved; and the revenue of the Portuguese authorities in Macao increased steadily. In ten years or so, the Portuguese in Macao had again accumulated some capital to invest in maritime insurance. After a number of years, their capital reached one million Cruzados and yielded a profit of 100,000 Cruzados a year, making the Senate in Macao rather comfortably off.

Meanwhile, in the tide of reform, Macao formally became a stop-over for merchants from various countries coming to China to trade. During the period from the end of the 17th century to the beginning of the 18th century, Macao had been the place to "spend the winter" in China for foreign merchants who had unfinished matters to deal with after their ships had left. But in 1725, after the sudden rejuvenation of Macao, the Qing Government issued an order that almost completely prohibited the foreigners coming from abroad from residing in Macao, and as discussed above, the Portuguese kept merchants from Britain, the Netherlands, France and other countries from entering Macao. In 1746, the King of Portugal forbade other Westerners to trade and reside in Macao, so these businessmen quietly spent their winters in Canton.

In 1750, the Acting Xiangshan Magistrate, Zhang Zhentao, brought this problem to light before the top officials of Guangdong. The Guangdong top officials informed the Portuguese authorities in Macao that foreign merchants specially approved by the Chinese authorities might stay in Macao to "spend the winter". The next year, a Dutch merchant brought three foreign women with him to a firm in Canton and stayed there secretly, violating the regulation that the foreign women had to remain on board. This incident, instead of bringing trouble to the foreign women, made the Guangdong officials permit them to stay in Macao before returning home, so as to show "solicitude for the foreign businessmen". Afterwards, a British businessman, Flint, broke into Tianjin to present his accusation against the Guangdong customs and Guangdong brokers for their blackmail; the Viceroy of the Two Guangs, Li Shiyao, prohibited the foreign businessmen from spending the winter in Canton, as one of the measures to strengthen the guard on the foreigners. The ban was then approved by the Qianlong Emperor, so the Portuguese authorities in Macao had no way to oppose it. Beginning in 1755, the Portuguese Governor of Macao had to permit the merchants from other Western countries to stay at Macao temporarily, much against his will.

It quickly proved that making Macao a temporary stop-over for foreign merchants and their dependents coming to China was beneficial to the Macaonese. The Portuguese in Macao could receive rent from the merchants who leased their houses and profit from their daily consumption. In addition, the Portuguese also "cooperated" with the other Western merchants who were forbidden to trade in Macao by "leasing" their names to these businessmen, to facilitate their trade with Chinese merchants. Though quite a few Portuguese complained that through such "cooperation" the foreigners benefited much more than the Portuguese, they were able to make some money with no capital. Thus, when Portugal carried out reforms at home, some noticeable changes took place in Macao as well, enabling this lifeless trading port to have some vitality again.

During the 1760s, the reforms in Portugal continued to influence Macao. One of the measures affecting Macao most was the order suppressing the Jesuits, who were hostile to Marquis of Pombal and influential in Europe as well as in Macao. The suppression on the Society of Jesuits started in 1759. In 1762, following orders issued in Portugal, the Portuguese authorities in Macao took measures against the Jesuits. All the properties owned by the Jesuits, including the magnificent St. Paul's church, were confiscated by the Portuguese authorities. The St. Paul's University College, which had enjoyed a great reputation for a long time, and the newly built Royal College of St. Joseph were also sealed up and their students dispersed. Twenty-four Jesuits were sent to Europe under escort and subjected to all kinds of torture in a castle in Italy. The 200 year old collection of the library of the St. Paul's University College, including a large number of valuable rare books, was sold for a trifling sum of money to a local merchant by the Portuguese authorities in Macao. The merchant shipped the books to Goa and sold them there, depriving Macao of irreplaceable cultural heritage.

After the Jesuits were driven away, the piece of land used by them in Duimianshan was also "given up". Before that, the Dominicans and Augustinians, discouraged by the frequent expulsions by the Chinese local officials, had already given up the land they illegally occupied in Duimianshan. To maintain a lay brother and slaves who held the place, the Jesuits had to spend 215 taels of silver a year, while the rice grown there was worth less than 30 taels. But for the request of the Senate, the Jesuits would have given up the place long ago. After the Jesuits were driven away, no Portuguese resided in Duimianshan; by 1764 or so, there was already no trace of the Portuguese on the island. The Duimianshan problem was unexpectedly solved. The Chinese authorities had neglected the problem for a long time, and if it had not been solved then, it would have become complicated later on. Afterwards, the Portuguese authorities in Macao continued to be hostile towards the Jesuits. In 1767, they forbade a French Jesuit to reside in Macao, despite the approval of the Viceroy of the Two Guangs. In 1775, the Portuguese in Macao annulled the election of a Senator, when he was found out to be a disguised former Jesuit.

The suppression of the Jesuits was a measure taken by the Portuguese secular aristocrats to beat down the influence of the church and to strengthen the authority of the Royal Court. Although the diminution of Church power seems on the face of it like a progressive movement, it had been the Jesuits who played the key role in the spread of science and Western culture in China and elsewhere and in the introduction of Chinese knowledge and culture to Europe. Without the Jesuits, cultural exchange and the cultural wealth of Macao both suffered. From 1762 until the end of the 18th century, only one former Jesuit did fruitful research on botany in places like Macao, South China and South Vietnam, and introduced his research results to the West. And some Jesuits in Beijing tried to ship to China via Macao some etched copperplate made in France describing Emperor Qianlong's military victories, thus introducing the art of making copperplate engravings to China. These were only important contributions made by the Portuguese in Macao to the cultural exchanges between China and the West in that period.

At the beginning of the 1770s, the reforms advocated by Marquis of Pombal became a spent force, like an arrow at the end of its flight. After King Jose I's death in 1777, Marquis of Pombal dismissed by Queen Maria I succeeding the throne. Throughout the 1770s, no major reforms were carried out in Macao. The only incident worth noting was the conflict between the Chinese authorities and the Portuguese authorities caused by the Francis Scott case in 1772. The historical materials about the case no longer exist in the West, and only a few details can be found in the archives of the Qing government's Junjichu (Council of State) under the title of "foreign affairs".

To sum up, on August 31, 1772, a British sailor called Francis Scott hired a Chinese called Liu Yami to work in Macao. By December 14, Liu had worked four months and wanted to go home, so he asked Scott to pay him the two yuan salary owed to him. Scott insisted that Liu Yami, who did not want to be far away home, go abroad with him, saying he would pay him the salary in arrears at that spot. In the course of argument, another Chinese, Huang Yasan, hit Scott with his fist and Scott hurt Liu Yami on the head with his sword; finally Liu Yami was kicked to death.

According to hearsay, the Portuguese authorities in Macao arrested and interrogated Scott. Scott refused to admit his crime, and the Catholic eye-witnesses were reluctant to provide any testimony disadvantageous to a fellow Catholic, so the Portuguese authorities in Macao contended that Scott was innocent and refused to hand him to the court of the Vice Magistrate of Xiangshan County. The Chinese officials took measures like cutting off Macao's food supplies, after repeatedly requesting that criminal be tried by the Vice Magistrate. In order to end this troublesome case, the Portuguese authorities convened a General Council. At the meeting, one Senator claimed that Scott was innocent, and consenting to the sacrifice of an innocent man was unjustifiable. The Vicar-general of the Bishopric argued that the interests of the community was much more important than an individual's life. For the sake of saving the community from inevitable destruction, even if this person were innocent, he accept trial. If he refused to obey, he would be a criminal. The procurator added that it would be better for the residents in Macao to surrender the man than to let everyone starve to death. After voting, the majority agreed with the Vicar-general and the procurator.

After the Portuguese authorities in Macao handed Scott over, the Chinese officials interrogated him at the court of the Vice Magistrate of Xiangshan County. At first Scott continued to deny his crime. He refused to confess anything until some eyewitnesses appeared before the court. During the period of trial, the Portuguese Governor of Macao and the British Select Committee of the East India Company in China wrote to Li Shiyao, the Viceroy of the Two Guangs. Li Shiyao instructed the officials in Xiangshan County to investigate carefully whether Scott was wronged or not, and whether there were other suspects. He notified the Portuguese authorities in Macao and the Select Committee of the East India Company that if they wanted to prove Scott's innocence, they would have to point out the real murderer. The Portuguese and British never accused other suspects throughout the trial. Thus, after a review of the case by the top officials in Guangdong, the Prefect of Canton arrived at Macao on February 23, 1773, and ordered that the Portuguese authorities in Macao have Scott hanged.

After this conflict, people from various countries, including the Portuguese, clearly saw the Portuguese position in Macao once more. In 1777, Bishop of Macao, Dom Alexander da Silva Pedrosa Guimaraens, as acting Governor of Macao, admitted in a report to the Senate that "by paying ground land rent, the Portuguese acquired temporary use and profit of Macao, ad libitum of the emperor (of China)".

Some colonialists in Lisbon did not think highly of the stratagem used by the Senate in Macao, which was to handle the relationship with Chinese authorities in the light of maintaining the existence of this settlement as its first task. They thought that the Senate of Macao always yielded to the Chinese authorities and that it had concentrated too much power on itself, so they were determined to carry out a reform focusing on reducing the Senate's power. At the beginning of the 1780s, when the Portuguese Queen Maria I appointed a new bishop to the Beijing Bishopric, she instructed the bishop to restore Macao's so-called ancient privilege. The Portuguese Minister for Colonial Affairs, Martinho de Mello e Castro, cooked up a memorandum in 1784, claiming that the Chinese used the opportunity created by the Portuguese in driving the pirates out and conquered the whole Xiangshan area, occupying a large area of fertile land and confining the Portuguese in Macao. At the same time, he instructed the Senate in Macao to investigate the matter in connection with the Chinese Emperor's edict ceding Macao to Portugal, and ordered Macao to carry out a political reform. The reform in Macao reached high tide.

One of the reform measures taken that year was giving the governor, originally only a military chief as Captain General had been, the power to control the Senate. The governor presided over economical, political, civil or military discussions in the Senate, and could oppose any motion militating against regulations, laws or commands from Lisbon and Goa. He also commanded a cohort of 400 men and sixteen officers. In 1787, to thoroughly reform jurisprudence, by petition of the Senate, Maria I appointed a minister to replace the original notorious Ouvidor commissioned by Goa authorities. This minister, a gentleman bred to law, whom the Chinese inhabitants called "fanchai", was the head of the civil government in Macao, with power over administrative and legal affairs. In the absence of the governor, he presided over the Senate as vice president. When the governor and minister agreed, the other members of the Senate had merely to sign off on their resolutions. In addition, the Portuguese bought the Senate House i.e. Yishiting for 80,000 taels of silver. The house had been a Chinese building, and the Portuguese rebuilt it into a Western-style building with two stories.

After these reforms, certain Portuguese colonialists created troubles so as to realize the important targets of their reform: shaking off the Chinese authorities' jurisdiction over Macao. At that time, a thorny problem facing the Portuguese was that with the increase of Chinese inhabitants in Macao, many Chinese peddlers were putting up sheds to sell food, wine and other goods. The Chinese officials did not prevent such behaviour in time. One day in the 8th month (Chinese traditional calendar) of 1787, a black slave got drunk in a Chinese wine-shed and did not obey the order of a Portuguese official. The Portuguese official was annoyed and blamed the wine-shed owner for selling wine to the black slave; then Chinese peddlers disputed with the Portuguese official. Philip Lawrence Mattos, the Procurator, and his followers, used the opportunity to start trouble. He led soldiers and slaves in destroying the sheds put up by the Chinese peddlers, pulled down three houses and injured a number of Chinese inhabitants. At the same time, Mattos and his followers egged on the slaves to steal and provoked trouble at Mongha Village, attempting to drive away the Chinese villagers. In addition, the Portuguese authorities of Macao no longer reported to the Chinese authorities when Portuguese ships arrived at Macao.

Hearing of the incident, Peng Yu, the Magistrate of Xiangshan County, hurried to Macao and demanded that the Procurator meet him. The Portuguese official refused to do so, but asked Peng Yu to negotiate at the newly built Senate House. Peng Yu regarded the Senate House as "a foreign temple", declaring: "I am an official of China, how can I handle official business in a foreign temple?" He had a tent erected and a table set up in the main street with guards surrounding it, again demanded a meeting with the Procurator and the interpreter, and required them to hand over the offenders. Mattos dodged, refusing to see Peng Yu, so Peng Yu met with the Minister Lazaro da Silva Fereira instead. Fereira presumptuously claimed that they had resolved to wipe out the worthless section of the Chinese community, to dismantle the shanties at Patane and other places, and to evict the villagers in Mongha Village, so as to place the colony on its old footing and recover the rights usurped by Chinese.

Seeing that Fereira and others were too arrogant to reason with, Peng Yu hurried to Canton to report the incident. The Viceroy of the Two Guangs and the Governor of Guangdong moved the troops of Xiangshan Brigade out of the Barrier Gate and stationed them at Mongha and other villages in the name of tracking down and arresting bandits. They ordered the Prefect of Canton, Zhang Daoyuan, to seal off the Barrier Gate to cut off all communications with Macao and prohibit all the daily necessities, including food from being sent to Macao.

Facing famine, the arrogant colonialists had to give up their so-called "new regime". First, Fereira asked the Senate to mediate, but the Chinese officials would communicate only with the Procurator, denying that anybody else had the qualifications to deal with Chinese officials. The Senate had to convene a General Council. The council dismissed the wayward Procurator Mattos and decided to let the procurator of next year assume his post ahead of time and to restore the traditional system of subordination to China. The Guangdong top officials did not end the blockade against Macao until the Portuguese had pleaded guilty and submitted a written pledge that they would never commit such offenses again.

Afterwards, the Senate complained to the Queen Mary I that due to the rashness of one or two persons, the whole settlement had nearly suffered a complete destruction. In order to make the procurator act in unison with the Senate in the future, they requested that despatches from the Chinese officials should be opened only at the Senate oral sittings. This proposal was approved by the Queen. In the meantime, in order to prevent Chinese peddlers from continuing to put up sheds in a disorderly fashion, the Senate got permission from the Chinese authorities to donate money to build a bazaar, later called St. Dominic Market. The bazaar was completed in 1790 and many Chinese peddlers set up stalls there, improving the appearance of the streets.

In the later 1790s, the reform in Macao was gradually drawing to an end. The Portuguese took no more important reform measures. Especially, they wished to avoid confrontation with the Chinese authorities. In 1792, when a sailor from Manila killed three Chinese in a fight, the Portuguese authorities immediately sent the murderer to the Chinese authorities to be tried and executed. On the execution ground, when some Chinese inhabitants hurled abuse at the procurator and other Portuguese officials, the Governor of Macao restrained the Portuguese soldiers from retaliating. The Senate also regretted that the funds they had accumulated in the past decades were used up in the reforms, so they had no more money for municipal expenditures. That being the case, the Portuguese authorities in Macao had little will and even less ability to further carry out any reform.

It is clear that the reform, carried out by the Portuguese for nearly forty years off and on, had no long-lasting effect. The reform carried out in Portugal was started like a farce and ended up with a tragedy. Among the series of reform measures promulgated, only the abolition of the royal monopoly of trade had some positive effects upon the economy of Macao. More importantly, the reform in the 1780s that was intended to shake off China's jurisdiction and turn Macao into Portugal's colony was no more than wishful thinking in the heyday of the Qing dynasty. Neither in the economic nor in the political field did this protracted reform fulfil the expectation of the Lisbon Court.