During the 15th century, China had become economically and technologically advanced compared to civilizations in Europe at the time, and its fleet, which had reached a total of 3,500 ships, was unmatched by any other world power. Nevertheless, after conducting several trade expeditions with the massive fleet, the Chinese ships were either burned in the docks or left to rot. With that, China began to revert to the xenophobic policies of its past and reduce its presence in other lands. By 1525, the largest naval fleet in the world had essentially been destroyed or dismantled by China itself. 

While China was in the process of isolating itself from the rest of the world, the European explorers were beginning to discover new lands, such as North America and South America. Among the countries doing the most exploring during this time were the Portuguese. The Portuguese had reached India in 1498, and by 1509 they had established part of their empire in India. In 1511, the Portuguese captured the large spice trading center of Malacca in Malaysia, and like their base in India, Malacca allowed the Portuguese to have a foothold, thereby providing access to China and Southeast Asia (Brinkley 1904).

The Portuguese explorer Jorge Álvares visited the Chinese coast in 1513 and was the first European to do so via the sea. Shortly after, more Portuguese visited around the Tunmen Inlet, which is believed to have been somewhere around the Pearl River Delta, and an establishment was set up there in 1514. 

The location of Macau was beneficial and strategically chosen by the Portuguese, as it was in close communication with Guangzhou and connected via a river system. In contrast to their earlier dealings with the Chinese, the Portuguese attempted to appear more humble and comply with the wishes of the Chinese rather than with force.