Portugal to Return Control of Macao to China in 1999

LISBON —  Portuguese leaders have agreed to return control of the territory of Macao to China in 1999 in accordance with Chinese wishes, sources close to the top-level negotiations said today.

The sources, who spoke on condition of anonymity, said the date was agreed to Tuesday night at a Council of State meeting convened to discuss the future of the territory, which China’s crumbling imperial government ceded to Portugal in 1887.

The two countries are expected to sign an agreement on the transfer after a final round of negotiations in Peking early this year, according to the sources.

Portuguese and Chinese delegations have met three times in Peking since 1985 to discuss Macao’s future in talks patterned after the Chinese-British agreement for the return of the British colony of Hong Kong in 1997.

Macao, 40 miles southwest of Hong Kong on China’s east coast, consists of a tiny isthmus and two small islands. It is home to 400,000 people, 97% of whom are of Chinese origin.

Portuguese radio, quoting government sources, said China agreed that Macao should be returned after Hong Kong and that Portugal accepted Chinese proposals for the Portuguese administration to withdraw before the year 2000.

The Peking government last week issued a statement saying that the return of Macao after 2000 was unacceptable.

Gambling is Macao’s biggest industry, attracting more than 4 million tourists a year and accounting for 25% of its tax revenue.

Observers say China plans to absorb the thriving capitalist economies of Hong Kong and Macao as part of plans to liberalize economic practices in southern China.