The commercial competition of Macao is no longer to be dreaded. But this decaying Portuguese possession has recently acquired a certain importance in the eyes of the Hong Kong authorities and our statesmen in England by the fears of French aggression aroused by apparent endeavours to gain a footing in Macao. Attempts have been made to purchase property in it in the name of the French Government which are suspected to be the thin end of the wedge. Although the colony is not dangerous in the hands of its present possessors, it might become so in the power of more enterprising neighbours. Were it occupied by the French a much larger garrison would be required in Hong Kong. Of course, any attempt to invade our colony from Macao would be difficult; as the transports could not be convoyed by any large warships owing to the shallowness of the sea between the two places until Hong Kong harbour is reached. One battleship or cruiser, even without the assistance of the forts, should suffice to blow out of the water any vessels of sufficiently light draught to come out of the port of Macao. If any specially constructed, powerfully armed, shallow‐draught men‐o’‐war—which alone would be serviceable—were sent out from Europe, their arrival would be noted and their purpose suspected. Still an opportunity might be seized when our China squadron was elsewhere engaged and the garrison of Hong Kong denuded. On the whole, the Portuguese are preferable neighbours to the aggressive French colonial party, which is constantly seeking to extend its influence in Southern China. In 1802 and again in 1808 Macao was occupied by us as a precaution against its seizure by the French. When garrison duty in Hong Kong during the damp, hot days of the summer palled, I once took ten days’ leave to the pleasanter climate of Macao. I embarked in Victoria in one of the large, shallow‐draught steamers of the Hong Kong, Canton, and Macao Steamboat Company, which keeps up the communication between the English and Portuguese colonies and the important Chinese city by a fleet of some half‐dozen vessels. With the exception of one, they are all large and roomy craft from 2,000 to 3,000 tons burden. They run to, and return from, Canton twice daily on week‐days. One starts from Hong Kong to Macao every afternoon and returns the following morning, except on Sundays. Between Macao and Canton they ply three times a week. The fares are not exorbitant—from Hong Kong to Macao three dollars, to Canton five, each way; between Macao and Canton three. The Hong Kong dollar in 1901 was worth about 1_s._ 10_d._