War between Phillip II's possessions and other countries led to a deterioration of Portugal's Empire, as with the loss of Hormuz to England, but the Dutch Empire was the main beneficiary. The VOC began immediately to prise away the string of coastal fortresses that, at the time, comprised the Portuguese Empire. The settlements were isolated, difficult to reinforce if attacked, and prone to being picked off one by one, but nevertheless the Dutch only enjoyed mixed success in its attempts to do so. Amboina was captured from the Portuguese in 1605, but an attack on Malacca the following year narrowly failed in its objective to provide a more strategically located base in the East Indies with favorable monsoon winds. The Dutch found what they were looking for in Jakarta, conquered by Jan Coen in 1619, later renamed Batavia after the putative Dutch ancestors the Batavians, and which would become the capital of the Dutch East Indies. Meanwhile, the Dutch continued to drive out the Portuguese from their bases in Asia. Malacca finally succumbed in 1641 , Colombo in 1656, Ceylon in 1658, Nagappattinam in 1662 and Cranganore and Cochin in 1662. Goa, the capital of the Portuguese Empire in the East, was unsuccessfully attacked by the Dutch in 1603 and 1610. Whilst the Dutch were unable in four attempts to capture Macau from where Portugal monopolized the lucrative China-Japan trade, the Japanese shogunate's increasing suspicion of the intentions of the Catholic Portuguese led to their expulsion in 1639. Under the subsequent sakoku policy, from 1639 till 1854  the Dutch were the only European power allowed to operate in Japan, confined in 1639 to Hirado and then from 1641 at Deshima. In the mid 17th century the Dutch also explored the western Australian coasts, naming many places.

What was Portugal's main economic strength in Macau?
China-Japan trade