Red Boom in Macao

Hong Kong's profitable traffic with Red China is now but a sixth of what it was last December. But that still does not close China's door to the West. The trade has spread across the wide Pearl River mouth to the ancient, gaudy Portuguese colony of Macao (pop. 400,000). Standing on a peninsula and two tiny islands, Macao (total area: 6 sq. mi.) is a place addicted to gold smuggling, with customs officers who look the other way and businessmen who will deal with anybody. It was at Macao, four centuries ago, that white men got their first firm foothold on the mainland of Asia. Last week Macao's air-conditioned opium dens were prospering, godown (warehouse) space was renting at a premium, and the waterfront was crowded with Hong Kong coolies who have learned there is money to be made on Macao's docks. Hong Kong traders were moving in, too.

Muddy Pearl. Junks and sloops were anchored offshore. A Japanese trawler arrived from U.S.-occupied Okinawa, carrying oil. Macao's Wharf No. 31, an oil pumping dock, was busy day & night. British, Danish and Panamanian freighters, sometimes pausing to lighten their load at Macao, steamed upstream to Whampoa, the port of Canton, through a muddy Pearl River channel which the busy Red Chinese recently deepened. Freighters on the Pearl last week were laden with steel rails, zinc plate, asphalt, Indonesian rubber, Pakistan cotton, American trucks, steel piping, tubing. To China's Reds, Macao and Whampoa are not ideal: goods must be long-hauled by rail 2,000 miles to the north. But to unload farther north on China's coast, ships must run the Nationalists' blockade.

Gold Net. The man behind Macao's prosperity is a shrewd, wiry Portuguese-Dutch-Malay named Pedro J. Lobo, who runs Asia's largest gold market in Macao and in fact runs Macao also. Lobo lives well, and in his spare time composes music (including an operetta called Cruel Separation). Lobo's title is economic director of the colony. On each ounce of gold, most of which arrives on Catalina flying boats owned by Lobo, he levies two taxes: an official one of 35-c- for the Macao treasury, another of $2.10 for himself. This has netted Lobo and four partners an estimated $3,000,000 in the first six months of 1951.

In his swimming pool-equipped Villa Verde on Macao's outskirts, Lobo shrugged off questions about the propriety of the trade. Just throwing a few crumbs to the Reds to keep them off his neck, he explained, recalling that during World War II he had stood the Japanese off, for the Allies' benefit, in similar fashion. But Macao's aid to Mao is more than crumbs, and even crumbs are important to a regime hungering for war materials.

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