This whole sequence was supposedly in Macau, and it cuts a couple of times to Chai waiting in his boat in the outer harbour as he has been warned not to go on land. However, I can confirm that this location, despite the "Bar Bela-Vista" sign in the first image, was shot fully in Hong Kong around a cluster of old villas collectively known as called "Lung Uk" (according to a 1970 map). It consisted of 4 detached houses on a terrace above Castle Peak Road in Tsing Lung Tau.
Unfortunately (yep, you guessed it), they were redeveloped in the early 1990s into the huge "Sea Crest Villa Phase 3" development (Block 10 specifically). The area was also affected by the widening of Castle Peak Road in the early 2000s. Former (now deceased) Chief Secretary of the Colonial HK Government, Sir David Akers-Jones famously lost his house to the same widening project, and nearby Dragon Garden lost a large portion of its lower gardens to the new road as well.
Anyway, here is an aerial image from 1982 to show you what the site looked like when the houses were intact. The building on the left (#4) is the one that is disguised as a cafe in the movie - where "Number 6" (Shing Fui-on) is sitting as the taxi arrives. The main exchange takes place in the next house (#3) along and the gunfight sort of carries on across these two properties and the next one (#2). Far right was #1 - part of the cluster but located down the hill and can't be seen on film. This post is a bit of an image bonanza because I feel these old forgotten places are worth documenting as much as possible.
1982 aerial courtesy HKmaps.hk
On a 1970 map, the house at the back (disguised as a Macau-sounding bar) was #4
Taxi pulls in to #3
General leaves and goes nextdoor to #2, signalling the ambush
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