$XWKHQWLFDWLQJ&XOWXUDO7RXULVP )RON9LOODJHVLQ+DLQDQ&KLQD E\ 3KLOLS)HLIDQ;LH $WKHVLV SUHVHQWHGWRWKH8QLYHUVLW\RI:DWHUORR LQIXOILOPHQWRIWKH WKHVLVUHTXLUHPHQWIRUWKHGHJUHHRI 'RFWRULQ3KLORVRSK\ LQ 3ODQQLQJ :DWHUORR2QWDULR&DQDGD 3KLOLS)HLIDQ;LH $XWKRU·V'HFODUDWLRQIRU(OHFWURQLF6XEPLVVLRQRI$7KHVLV ,KHUHE\GHFODUHWKDW,DPWKHVROHDXWKRURIWKLVWKHVLV7KLVLVDWUXHFRS\RIWKHWKHVLVLQFOXGLQJ P\UHTXLUHGILQDOUHYLVLRQVDVDFFHSWHGE\P\H[DPLQHUV ,XQGHUVWDQGWKDWP\WKHVLVPD\EHPDGHHOHFWURQLFDOO\ DYDLODEOHWRWKHSXEOLF
i i $XWKHQWLFDWLQJ&XOWXUDO7RXULVP )RON9LOODJHVLQ+DLQDQ&KLQD
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·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´DXWKHQWLFµHWKQLFLW\,WPDNHVUHFRPPHQGDW LRQVIRUWRXULVPSODQQHUVVXFKDVHWKQLF SDUWLFLSDWLRQLQWKHGHFLVLRQ PDNLQJSURFHVVWKHGHYHORSPHQWRIVWUDWHJLFDOOLDQFHDPRQJWRXULVP VWDNHKROGHUV DQG WKH WDNLQJ RI VWHSV WR SURPRWH WKH PDLQWHQDQFH RI /L FXOWXUH ,W DOVR VXJJHVWV RSSRUWXQLWLHV IRU DSSO\LQJ WKLV FRQFHSWXDO IUDPHZRUN RI FXOWXUDO WRXULVP WR RWKHU GLIIHUHQW VLWXDWLRQVERWKZLWKLQ+DLQDQDQGHOVHZKHUH .H\ZRUGV$XWKHQWLILFDWLRQ$XWKHQWLFLW\&XOWXUDO7RXULVP/LPLQRULW\+DLQDQ
iii $FNQRZOHGJPHQWV :ULWLQJLVDSDLQ7RZULWHDJRRGG RFWRUDOWKHVLVUHTXLUHVH[WHQVLYHUHVHDUFKDQGWLPHFRPPLWPHQW ,IHHOIRUWXQDWHWKDW,KDYHDZRQGHUIXOVXSHUYLVRU ²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iv /LVWRI7DEOHV 7DEOH $&RPSDULVRQRIWKH3ULPRUGLDODQGWKH6LWXDWLRQDO 7DEOH 0DF&DQQHOO·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·$WWLWXGHV7RZDUG)LYH 3DUDGR[HV v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·3HUVSHFWLYH )LJXUH 7RXULVP%XVLQHVVHV·3HUVSHFWLYH )LJXUH 9LVLWRUV·3HUVSHFWLYH )LJXUH (WKQLF&RPPXQLWLHV·3HUVSHFWLYH v i &217(176 $XWKRU·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²7+(678'<$5($ 3.1 &KLQD 6LWHDQG6LWXDWLRQ +LVWRU\ (FRQRP\ 3.2 7RXULVPLQ&KLQD 3.3 +DLQDQ,VODQG 6LWHDQG6LWXDWLRQ +LVWRU\ (FRQRP\ 3.4 (WKQLF0LQRULWLHVLQ+DLQDQ +LVWRU\ vii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viii &+$37(56,;²7285,60%86,1(66(6 7RXULVP%XVLQHVVHVLQ+DLQDQ 7KH6WUXFWXUHRI7RXULVP%XVLQHVVHV 7KH'LVWULEXWLRQRI)RON9LOODJHVLQ 1RQFRPPHUFLDOL]DWLRQYHUVXV&RPPRGLILFDWLRQ &XOWXUDO(YROXWLRQYHUVXV0XVHXPLILFDWLRQ (FRQRPLF'HYHORSPHQW YHUVXV&XOWXUDO3UHVHUYDWLRQ (WKQLF$XWRQRP\YHUVXV6WDWH5HJXODWLRQ 0DVV7RXULVP'HYHORSPHQWYHUVXV6XVWDLQDEOH&XOWXUDO7RXULVP 6XPPDU\ &+$37(56(9(1²9,6,7256 7RXULVWVLQ+DLQDQ 7KH%DFNJURXQGRI6XUYH\HG)RON9LOODJHV %DRWLQJ$UHFD0DQRU 6DQ\D/L)RON9LOODJH ,QGRQHVLDQ9LOODJH 7KH3URILOHVRI6XUYH\HG7RXULVWV 1RQFRPPHUFLDOL]DWLRQYHUVXV&RPPRGLILFDWLRQ &XOWXUDO(YROXWLRQYHUVXV0XVHXPLILFDWLRQ (FRQRPLF'HYHORSPHQWYHUVXV&XOWXUDO3UHVHUYDWLRQ (WKQLF$XWRQRP\YHUVXV6WDWH5HJXODWLRQ 0DVV7RXULVP'HYHORSPHQWYHUVXV6XVWDLQDEOH&XOWXUDO7RXULVP 6XPPDU\ &+$37(5(,*+7²(7+1,&&20081,7,(6 7KH3URILOHVRI'DQFH3HUIRUPHUV 1RQFRPPHUFLDOL]DWLRQYHUVXV&RPPRGLILFDWLRQ /L'DQFH3HUIRUPDQFH 'DQFH3HUIRUPHUV (FRQRPLF'HYHORSPHQWYHUVXV&XOWXUDO3UHVHUYDWLRQ &XOWXUDO(YROXWLRQYHUVXV0XVHXPLILFDWLRQ (WKQLF$XWRQRP\YHUVXV6WDWH5HJXODWLRQ 0DVV7RXULVP'HYHORSPHQWYHUVXV6XVWDLQDEOH&XOWXUDO7RXULVP 6XPPDU\ &+$37(51,1(²&203$5,6216 *RYHUQPHQWV 7RXULVP%XVLQHVVHV 9LVLWRUV (WKQLF&RPPXQLWLHV 6XPPDU\ ix &+$37(57(1²&21&/86,216 7KHRUHWLFDODQG3UDFWLFDO,PSOLFDWLR QRI&RQFHSWXDO)UDPHZRUN 5HFRPPHQGDWLRQVIRU6XVWDLQDEOH&XOWXUDO7RXULVP'HYHORSPHQW )XWXUH5HVHDUFK'LUHFWLRQV &RQFOXGLQJ5HPDUNV 5()(5(1&(6 $33(1',&(6 x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´VSHFWDFOHVµRIWKH´H[RWLFµSHRSOHDQGWKHLUFXOWXU HDQGDVVDXOWVWUDGLWLRQDOOLIH ZD\V YDQGHQ%HUJKHDQG.H\HV &XOWXUHRU´WUDGLWLRQµLVWUDQVIRUPHGLQWRDVHWRIWKLQJV ZKLFKDUHDWRQFHV\PEROLFRIWKH:HVWHUQSXUVXLWRIWKHH[RWLF´2WKHUµDQGWKHFRPPRGLWLHVRI PRGHUQL]DWLRQ -ROO\ 7KHLPSDFWRIWRXULVPRQLQGLJHQRXVFXOWXUHVRIWHQSURGXFHVDVRFLDO VLWXDWLRQ LQ ZKLFK ORFDO SHRSOH DOWHU WKHLU OLYHV WR VXLW WKH GHPDQGV RI WRXULVWV +RZHYHU VXFK D WUDGLWLRQDO ´LPSDFWµ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·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´WKH DJJUHJDWH RI DOO EXVLQHVVHV WKDW GLUHFWO\ SURYLGH JRRGV RU VHUYLFHV WR IDFLOLWDWHEXVLQHVVSOHDVXUHDQGOHLVXUHDFWLYLWLHVDZD\IURPWKHKRPHHQYLURQPHQWµ 6PLWK S 7KH WKLUG FDWHJRU\ DQ LQWHJUDWHG GHILQLWLRQ FRPELQHV ERWK VXSSO\ DQG GHPDQG VLGHV RI WRXULVP DQG WKHUHIRUH H[KLELWV JUHDWHU YDULDWLRQ LQ LWV FRQWHQW /HLSHU *XQQ LQ KLV ZHOO NQRZQ ERRN ´7RXULVP 3ODQQLQJµ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´W KHVRFLDOKHULWDJHRIDSHRSOHLQFOXGLQJWKHLUPDWHULDODUWHIDFWV EHOLHIV\VWHPVUHOLJLRQVIRUPVRIJRYHUQPHQWFXVWRPVODQJXDJHUHFUHDWLRQKRXVLQJFRPPHUFLDO DFWLYLW\ IRUPV DQG SODFHV RI ZRUN HGXFDWLRQ DQG VFLHQFH DQG WHFKQRORJ\µ 6PLWK S &XOWXUH FRQVLVWV RI SDWWHUQV H[SOLFLW DQG LPSOLFLW RI DQG IRU EHKDYLRXU 6LQJHU &XOWXUDO FKDQJHFDQEHVHHQDV´DQ\VKDUHGUHODWLYHO\HQGXULQJWUDQVIRUPDWLRQRIFXOWXUDOO\SDWWHUQHGEHOLHI RUEHKDYLRXUµ :LQWKURSS $QH[W UHPHIRUPRIFXOWXUDOFKDQJHLVDFFXOWXUDWLRQZKLFKLV GHILQHG DV ´FXOWXUDO FKDQJH XQGHU FRQGLWLRQV RI GLUHFW FRQWDFW EHWZHHQ WKH PHPEHUV RI WZR VRFLHWLHVµ :LQWKURS S 3HWLW 6NLQQHU IURP DQ DQWKURSRORJLFDO SHUVSHFWLYH VXJJHVWV WKDW FXOWXUDO FKDQJHV ZLOO RFFXU LQ WZR XQGHUO\LQJ ZD\V SULPDULO\ LQ WKH LQGLJHQRXV VRFLHW\·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´LQWLPDWHµ DQG ´DXWKHQWLFµ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p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´D JHQUH RI VSHFLDO LQWHUHVW WRXULVP EDVHG RQ WKH VHDUFK IRU DQG SDUWLFLSDWLRQ LQ QHZ DQG GHHS FXOWXUDO H[SHULHQFHV ZKHWKHU DHVWKHWLF LQWHOOHFWXDO HPRWLRQDO RU SV\FKRORJLFDOµ 5HLVLQJHU S )URP DQ DQWKURSRORJLFDO SHUVSHFWLYH FXOWXUH LV PXFK PRUH WKDQ WKH ULWXDOV FHUHPRQLHV DQG GDQFHV ZKLFK UHVLGHQWVPLJKWSHUIRUPIRUWRXULVWVDWFXOWXUHFHQWUHV7KHULFKHUPHDQLQJR IFXOWXUHUHIHUVWRWKRVH DFWLYLWLHV DVVRFLDWHG ZLWK PDQ\ SULYDWH DQG XQNQRZQ WUDGLWLRQVWKDWDUHSDUWRIWKHORFDOSHUVRQ·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´D ILHOG ZLWKRXW D WKHRUHWLFDO KRPHµ $FFRUGLQJ WR DQWKURSRORJLVWV WRXULVWV DU H LOOSUHSDUHG WR YLVLW RWKHU FXOWXUHV 7RXULVWV ODFN LQIRUPDWLRQ DERXW 7 HWKQLFFXOWXUHDQGDUHXVXDOO\QDwYHDERXWZKDWWRH[SHFWDQGKRZWREHKDYH )ULGJHQ 7KH SUHYDLOLQJDVVXPSWLRQLVWKDWDQ\DWWHPSWWRXVHFXOWXUDOHOHPHQWVWRDFFRPPRGDWHWRX ULVWVZRXOG FKHDSHQ RU WULYLDOLVH WKH SUHVHQWDWLRQ DQG LQWHUSUHWDWLRQ RI HWKQLF DUWV DQG KHULWDJH .HOO\ 7RXULVP KDV ORQJ EHHQ SUHVXPHG WR EH VRPHWKLQJ WKDW H[LVWV LQGHSHQGHQWO\ RI FXOWXUH DQG WKDW DIIHFWVLWIURPRXWVLGH&XOWXUHDSSHDUVWRFRPH LQWRFROOLVLRQZLWKWRXULVPDQGFXOWXUDOWRXULVP SUDFWLFHPD\DFWXDOO\GHVWUR\WKHKRVWV·FXOWXUH 7XUQHUDQG$VK :RRG S KDV FKDUDFWHUL]HG WKH UHODWLRQVKLS EHWZHHQ FXOWXUH DQG WRXULVP DV FRQFHSWXDOL]HG LQ PXFK WRXULVP UHVHDUFKWKURXJKWKH´ELOOLDUGEDOOPRGHOµLQZKLFKDVWDWLFVSKHUH FXOWXUH LVKLWE\DPRELOHRQH WRXULVP +RZHYHU WKLV SHUVSHFWLYH LV LQFUHDVLQJO\ EHLQJ UHJDUGHG DV VLPSOLVWLF 7KH WHUP ´WRXULVWLF FXOWXUHµ LV SURSRVHG E\ 3LFDUG S LQ UHIHUHQFH WR F DVHV ZKHUH WRXULVP KDV EHFRPHDQLQWHJUDOSDUWRIFXOWXUHDQGZKHUHWKHLQWHUDFWLRQZLWKWRXULVWVLVDFHQWUDOFRPSRQHQWLQ WKHGHILQLWLRQRIHWKQLFLGHQWLW\DQGDXWKHQWLFLW\7KHFRQYHUJHQFHRIWRXULVPDQGFXOWXUHLQWKHODWH WKFHQWXU\LVSUHVHQWHGE\ 5LFKDUGV S DVDNLQGRISUDJPDWLF IDLWDFFRPSOL´LQVSLWHRI UHVHUYDWLRQVDERXWWKHSRWHQWLDOQHJDWLYHLPSDFWVRIWRXULVPRQFXOWXUHLWVHHPVWKDWWRXULVPDQG FXOWXUHDUHLQVHSDUDEOHµ,WZDVQRWXQWLO0F.HDQ·VGRFWRUDOGLVVHUWDWLRQ RQFXOWXUDOWRXULVP LQ%DOL,QGRQHVLDWKDWFRPPRQSHUFHSWLRQVZHUHUHVKDSHG0F.HDQFRQFOXGHGIURPKLVILHOGZRUN LQWKDWWRXULVPZDVVWUHQJWKHQLQJWKHDUWVLQ%DOLDQGWKDWWKH%DOLQHVHZHUHEHLQJTXLWH VXFFHVVIXO LQ PDLQWDLQLQJ WKH ERXQGDU\ EHW ZHHQ ZKDW EHORQJHG WR FXOWXUH DQG ZKDW FRXOG EH SUHVHQWHGWRWRXULVWV$WHUP´FXOWXUDOLQYROXWLRQµ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´DYLWDODQGH[FLWLQJULWXDOEHFDPHDQREOLJDWLRQWREHDYRLGHGµ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·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´VHFXODUµYHUVLRQRIWKHGDQFHSURYHGVRSRSXODU WKDWLWVRRQPLJUDWHGEDFNWRWKHWHPSOHV´LQDFX ULRXVUHYHUVDOWKDWWKHUHOLJLRXVDXWKRULWLHVGLGQRW 9 DQWLFLSDWH WKH WRXULVW ¶ZHOFRPH GDQFH· EHFDPH D VDFUHG GDQFH IRU ZHOFRPLQJ WKH JRGVµ 3LFDUG S 6XFK´FXOWXUDOLQYHQWLRQµ +DQVRQ FDQDOVREHIRXQGLQWKHFDVHRI0DRULLQ 1HZ =HDODQG ZKR LQFRUSRUDWHG WKH KLVWRULFDO LQDFFXUDFLHV RI HDUO\ DQWKURSRORJLVWV LQWR WKH FRQWHPSRUDU\XQGHUVWDQGLQJRIWKHLURZQFXOWXUH (WKQLF WRXULVP LV GHILQHG DV WKH FRPSRQHQW RI FXOWXUDO WRXULVP ZKLFK LV ´D IRUP RI UHFUHDWLRQ FRPELQLQJ FXOWXUDO DQG QDWXUD O UHVRXUFHV WKDW LV PDUNHWHG WR WKH SXEOLF LQ WHUPV RI ¶TXDLQW· FXVWRPV RI LQGLJHQRXV DQG RIWHQ H[RWLF SHRSOHVµ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·FXOWXUHRUPD\FDOFLI\DFXOWXUHLQWRD ´IUR]HQµSLFWXUHRIWKHSDVW$FXOWXUHLVQDPHGDQG VWHUHRW\SHG7KHYLVLWRUVHHNVWRVHHFKDUDFWHULVWLFVRIWKHLPDJHRIWKHFXOWXUHDQGWKHKRVWVRFLHW\ SURYLGHV WKH H[SHFWHG ´WUHDWµ )RU H[DPSOH 3LFDUG VKRZHG WKDW %DOLQHVH KDYH FRPH WR REMHFWLI\WKHLUFXOWXUHLQWHUPVRIWKHDUWVDQGWRHYDOXDWHWRXULVPLPSDFWLQWHUPVRIZKHWKHURUQRW WKHDUWVDUHIORXULVKLQJ2QWKHRWKHUKDQGUHVHDUFKRQHWKQLFWRXULVPXQYHLOVWKHSRVLWLYHDVSHFWV 10 RI LPSDFWV LW FDQ UHVWRUH DUWV UHYLWDOLVH VNLOOV IRV WHU FUHDWLYLW\ DQG SURYLGH D SODWIRUP IRU FRPPXQLWLHV WR SUHVHQW WKHPVHOYHV SRVLWLYHO\ &RKHQ *UDEXUQ 3LWFKIRUG $ FODVVLFH[DPSOHLV(VPDQ·V FDVHVWXG\RI/RXLVLDQDWKDWVXJJHVWHGWRXULVPKDVOHGWRWKHUH FUHDWLRQRI&DMXQLGHQWLW\DQGKHOSHGWRSHUSHWXDWHDQHWKQLFERXQGDU\WKDWPLJKWRWKHUZLVHKDYH GLVDSSHDUHGGXHWRDFFXOWXUDWLRQ (WKQLFLW\DQG&XOWXUDO7RXULVP (WKQLFLW\ LV DUJXDEO\ WKH PRVW IXQGDPHQWDO EDVLV RISHUFHLYHGGLVWLQFWLRQEHWZHHQKXPDQJURXSV *UDKDP$VKZRUWKDQG7XQEULGJH (WKQLFLW\FDQEHJHQHUDOO\GHILQHGDV´WKHH[LVWHQFHRI FXOWXUDOO\GLVWLQFWLYHJURXSVZLWKLQDVRFLHW\HDFKDVVHUWLQJDXQLTXHLGHQWLW\RQWKHEDVLVRIDVKDUHG WUDGLWLRQ DQG GLVWLQJXLVKLQJ VRFLDO PDUNHUV VXFK DV D FRPPRQ ODQJ XDJH UHOLJLRQ RU HFRQRPLF VSHFLDOL]DWLRQµ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´WKHFRQJUXLWLHVRIEORRGVSHHFKFXVWRPDQG VRRQDUHVHHQWRKDYHDQLQHIIDEOHDQGDWWLPHVRYHUSRZHULQJFRHUFLYHQHVVLQDQGRIWKHPVHOYHVµ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´VXEMHFW WR HEE DQG IORZµ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´EOXHSULQWµULVHVWRFRSHZLWKGLVWRUWHGFXOWXUH DQGDQHZFXOWXUHLVHVWDEOLVKHG ZLWKLWVRZQPHWKRGVIRUKDQGOLQJFKDQJHDQG WKHQHZVWHDG\VWDWHZKHUHQHZFRGHVDUH HQIRUFHGDQGDQHZHTXLOLEULXPHYROYHV:DOODFH·VF\FOHFOHDUO\UHIOHFWVWKHLQVWUXPHQWDODSSURDFK VXJJHVWLQJ WKDW FXOWXUH PRYHV W RZDUGV DQ HTXLOLEULXP LQ WKH KRVW VRFLHWLHV 7R VRPH H[WHQW WKH HTXLOLEULXP FDQ EH XQGHUVWRRG DV D ZD\ RI ´ERXQGDU\ PDLQWHQDQFHµ %DUWK ZKHUHE\ H[RJHQRXVIDFWRUVVXFKDVWRXULVPGHYHORSPHQWPD\DIIHFWWKHERXQGDU\EHWZHHQZKDWSHRSOHGR IRUYLVLWRUVDQGZKDWWKH\GRIRUWKHPVHOYHV %DVHG XSRQ WKH DERYH YLHZSRLQWV WZR SHUVSHFWLYHV UHODWHG WR WKH LPSDFWV RI WRXULVP RQ HWKQLFLW\ DUH SURSRVHG E\ +LWFKFRFN WKH SULPRUGLDO DQG WKH VLWXDWLRQDO 7KH SULPRUGLDO SHUVSHFWLYHVHHVHWKQLFLW\DVGHSHQ GHQWXSRQDVHULHVRI´JLYHQVµWKDWVXJJHVWFXOWXUHLVLPPXWDEOH DQG VWDWLF 7KH SULPRUGLDO DSSURDFK VXJJHVWV WRXULVP RQO\ SHUPLWV VHOHFWLYH H[SRVXUH WR RWKHU FXOWXUHV )UHTXHQWO\ DQ DUHD·V FXOWXUH LV GLVSOD\HG WKURXJK VWDJH SUHVHQWDWLRQV RIWHQ IRU D IHH 12 :KDWWKHWRXULVWDFWXDOO\VHHVLVMXVWDIDLQWUHIOHFWLRQRIWKHWUXHFXOWXUH&XOWXUDOLGHQWLW\LVUHJDUGHG DV ´URRWHG LQ D SULPRUGLDO VHQVH RI VKDUHG GHVFHQWµ DQG DV EHLQJ ´IRUPXODWHG ZLWK UHIHUHQFH WR FRQFUHWHFXOWXUDOPDUNHUVµ 9DQGH%HUJKHDQG .H\HVS 9DQGHQ%HUJKHDQG.H\HV LQGLFDWHGWKDWIURPDSULPRUGLDOSHUVSHFWLYHFXOWXUDOWRXULVPSOD\VDFULWLFDOUROHWRGLYLGHD PDUNHW LQWR WZR VHSDUDWH VHJPHQWV D WRXULVW DQG D WRXUHH 7KH SUHVHQFH RI WRXULVWV DIIHFWV WKH HWKQLFFRPPXQLWLHVLQWZRZD\V LWPDNHVHWKQLFPLQRULWLHVOHVVH[RWLFDQGWUDGLWLRQDODQG LW WUDQVIRUPV DQ HWKQLF SHUVRQ LQWR D ´WRXUHHµ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´DQ RQJRLQJ SURFHVV SROLWLFDOO\ FRQWHVWHG DQG KLVWRULFDOO\ XQILQLVKHGµ DQG DV ´DOZD\V PL[HG UHODWLRQDO DQG LQYHQWLYHµ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²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´DXWKHQWLFµHWKQLFLW\,QRWKHU ZRUGVLWZLOOEHPRUHFRQVWUXFWLYHWRLGHQWLI\WKRVHZKR PDNHFODLPVIRUDXWKHQWLFLW\DQGWKHLQWHUHVWVWKDWVXFKFODLPVVHUYH 7KH SUHVHQW UHVHDUFK ZLOO SURYLGH D VWURQJ FRQFHSWXDO IUDPHZRUN RQ WKH LVVXH RI DXWKHQWLILFDWLRQ LQ WKH FRQWH[W RI FXOWXUDO WR XULVP 7KH WKHVLV FRQWULEXWHV WR WKH OLWHUDWXUH E\ FRPSDULQJ WKH SHUVSHFWLYHV RI IRXU NH\ VWDNHKROGHUV LQ +DLQDQ ,VODQG &KLQD &XOWXUDO WRXULVP ZKHQ SXW LQWR SUDFWLFH FDQ FDXVH D VHULHV RI SDUDGR[HV EHWZHHQ FRQVHUYDWLRQ RI WUDGLWLRQ DQG FKDQJH LQ WKH SURFHVVRIGHYHORSPHQW7KHVHSDUDGR[HVDOVRFDQVHUYHDV\DUGVWLFNVWRHYDOXDWH WRXULVPFXOWXUH UHODWLRQVKLSV LQ D &KLQHVH FRQWH[W 7KH UHVHDUFK ZLOO XQFRYHU VRPH LQWHUHVWLQJ G\QDPLFVWKDWZLOOVLJQLILFDQWO\FRQWULEXWHWRWKHOLWHUDWXUHRQFXOWXUDOWRXU LVPLQGHYHORSLQJDUHDV DQGDWWKHVDPHWLPHWHVWWKHXWLOLW\RIWKHFRQFHSWXDOIUDPHZRUNIRUDXWKHQWLILFDWLRQ 6XPPDU\ 7KLVFKDSWHUKDVEULHIO\RXWOLQHGWKHVLJQLILFDQFHRIFXOWXUDOWRXULVP7KHEURDGJRDORIWKLVUHVHDUFK ZDVVXPPDUL]HGWRJHWKHUZLWKWKHVSHFLILFREMHFWLYHVWKURXJKZKLFKWKDWJRDOZLOOEHDFKLHYHG,W KDVDOVRUHYLHZHGWKHGHILQLWLRQVRIWRXULVPDQGFXOWXUHWKHFRQFHSWVRIFXOWXUDOWRXULVPDQGHWKQLF WRXULVP DQG HWKQLFLW\ DQG FXOWXUDO WRXULVP $QG ILQDOO\ WKH VLJQLILFDQFH R I WKLV UHVHDUFK ZDV LQWURGXFHG 7KH QH[W FKDSWHU SURYLGHV D WKHRUHWLFDO EDFNJURXQG WR WKH FRQFHSW RI DXWKHQWLFLW\ DQG FRPPRGLILFDWLRQ)RXUJURXSVRIVWDNHKROGHUVDUHLGHQWLILHGLQWKH+DLQDQFRQWH[WDQGWKHLVVXHRI DXWKHQWLILFDWLRQLVUDLVHG)XUWKHU ILYHSDLUVRISDUDGR[HVDGDSWHGIURP6ZDLQ DUHGHWDLOHGLQ RUGHU WR XQGHUVWDQG WKH LQKHUHQW WHQVLRQV EHWZHHQ FRQVHUYDWLRQ RI WUDGLWLRQ DQG FKDQJH LQ WKH 15 SURFHVVRIFXOWXUDOWRXULVPGHYHORSPHQW$FRQFHSWXDOIUDPHZRUNLVSURSRVHGDQGZLOOEHWHVWHG HPSLULFDOO\LQWKHFRQWH[WRI+DLQDQ&KLQD &KDSWHU7KUHHMXVWLILHVWKHFKRLFHRI+DLQDQDVWKHUHVHDUFKVHWWLQJDQGVHWVWKHJHRJUDSKLF FRQWH[W E\ GHVFULELQJ WKH VLWH DQG VLWXDWLRQ RI +DLQDQ ,VODQG LQFOXGLQJ HQYLURQPHQW HFRQRP\ VRFLHW\DQGFXOWXUH7KHVDPHFKDSWHUDOVRGLVFXVVHV+DLQDQ·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·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´D GHVLUHG H[SHULHQFHRUEHQHILWDVVRFLDWHGZLWKYLVLWVWRFHUWDLQW\SHVRIWRXULVPGHVWLQDWLRQV,WLVSUHVXPHG WREHWKHUHVXOWRIDQHQFRXQWHUZL WKWUXHXQFRPPHUFLDOL]HGHYHU\GD\OLIHLQDFXOWXUHGLIIHUHQWWKDQ WKDWRIWKHYLVLWRUµ 6PLWKS 6DSLU S WRRNDQHWKQRJUDSKLFSHUVSHFWLYHDQG GHILQHGDXWKHQWLFLW\DV´SHUVRQVLQWLPDWHFOXVWHUVRISHUVRQVFRPPXQLWLHVRUVRFLHW LHVZKRVHOLYHG H[SHULHQFHLVKDUPRQLRXVZLWKRUWUXHWRWKHLULQKHUHQWRULQWULQVLFFXOWXUDOVWUXFWXUHRUKLVWRULFDOO\ HPHUJHQW IRUPµ $XWKHQWLFLW\ FDQ EH DFKLHYHG E\ ZLOOLQJ DQG GRLQJ WKH JHQXLQH JRRG .LHUNHJDDUGS FUHDWLQJRU FKRRVLQJYDOXH 6DUWUHS DQG FXOWLYDWLQJ WKH FRQQHFWLRQ EHWZHHQ ILGHOLW\ WR WKH SDVW IRUWKULJKW UHFRJQLWLRQ RI WKH WDQJLEOH ZRUOG RI WKH SUHVHQWDQGDFRPPLWPHQWWRHQKDQFLQJWKHFRKHUHQFHEHWZHHQWKHWZR 6LPPHO ,Q WRXULVP DXWKHQWLFLW\ SRVHV DV REMHFWLYLVP ZKLFK KROGV WKH VSHFLDO SRZHUV ERWK RI GLVWDQFH DQG RI ´WUXWKµ 7D\ORU )XQGDPHQWDO WR WKH DXWKHQWLFLW\ FRQFHSW LV D GLDOHFWLF EHWZHHQ REMHFW DQG VXEMHFW WKHUH DQG KHUH WKHQ DQG QRZ 7RXULVP SURMHFWV ZKLFK LQYRNH W KH 17 FXOWXUDOO\ ´DXWKHQWLFµ VHHN WR ´UHDOLVHµ YDOXH DQG XQLTXHQHVV LQ WKHLU SURGXFWV WKURXJK WKH DSSOLFDWLRQRIDGLVWDQFHEHWZHHQVXEMHFWDQGREMHFWWKDWLVERWKVSDWLDOO\DQGWHPSRUDOO\GHILQHG $XWKHQWLFLW\LVYDOXDEOHRQO\ZKHUHWKHUHLVSHUFHLYHGLQDXW KHQWLFLW\6XFKLVWKH´SODVWLFµZRUOGRI WKHFRQVXPHU 7D\ORU *RIIPDQ ILUVWGLYLGHGDXWKHQWLFLW\RIH[SHULHQFHE\IURQWDQGEDFNUHJLRQVWKHIURQW UHJLRQ UHSUHVHQWV DQG SUHVHQWV LQDXWKHQWLF FRQWULYHG H[SHULHQFH ZKLOHWKHEDFNUHJLRQUH SUHVHQWV DQG SUHVHQWV DXWKHQWLF LQWLPDWH H[SHULHQFH 0DF&DQQHOO EDVHG RQ *RIIPDQ·V DQDO\VLV GHYHORSHG DQ DUJXPHQW WKDW WKH VHDUFK IRU DXWKHQWLFLW\ LV D PDMRU GULYLQJ IRUFH EHKLQG PRGHUQ WRXULVW EHKDYLRXU 7RXULVWVDFWXDOO\VHHNDXWKHQWLFLW\EXW DUHIUHTXHQWO\IUXVWUDWHGLQWKHLUVHDUFK )XUWKHUWRXULVWV·TXHVWIRUDXWKHQWLFLW\LVDOZD\VGRRPHGWRIDLOXUH0DF&DQQHOOVDZQRVDOYDWLRQLQ WRXULVP$WEHVWWKHUHLVWKHFUHDWLRQRID´IDOVHWRXULVWLFFRQVFLRXVQHVVµ7KLVLVWKHSURGXFWRID FRPPRGLW\GULYHQLQGXVWU\WKDWZRXOGWULFNWRXULVWVLQWRDFFHSWLQJWKDWFRQWULYHGDWWUDFWLRQVDUHLQ IDFW´DXWKHQWLFµ &RKHQS %RRUVWLQ RQFHFODLPHGWKDWPRGHUQWRXULVWVSXUVXH ´SVHXGRHYHQWVµEHFDXVHWKH\VHHNVXSHUILFLDOFRQWULYHGH[ SHULHQFHV $GRSWHGIURP*RIIPDQ·VQRWLRQRIIURQWDQGEDFNUHJLRQVHWWLQJV0DF&DQQHOOGHYHORSHGD IUDPHZRUNE\DGGLQJIRXUPRUHVWDJHV7KHVHLQWHUPHGLDWHVWDJHVDUHVRPHWLPHVJURXSHGWRJHWKHU DQGFKDUDFWHUL]HGDV´VWDJHGDXWKHQWLFLW\µ 6HH7DEOH ,QWKHPRGHUQLVWFULWLFDOWUDGLWLRQFXOWXUH ´RQVWDJHµLVYLHZHGDVFXOWXUHRXWRIFRQWH[W´7KHPRPHQWWKDWFXOWXUHLVGHILQHGDVDQREMHFWRI WRXULVPRUVHJPHQWHGDQGGHWDFKHGIURPLWVLQGLJHQRXVVSKHUHLWVDXUDRIDXWKHQWLFLW\LVUHGXFHGµ 7D\ORUS )XUWKHUWKHWRXULVPLQGXVWU\VHHNVWRFUHDWHHYHUGHHSHUIRUPVRI´VWDJHG DXWKHQWLFLW\µE\GUDZLQJWRXULVWVLQWRPRUHGHYLRXVO\FRQWULYHG´EDFNVWDJHVµ7KHVH´EDFNVWDJHVµ DV0DF&DQQHOOFDOOHGWKHPDUHPRUH´LQVLGLRXVDQGGDQJHURXVWKDQ DIDOVHIURQWµ S ,Q0DF&DQQHOOLQKLVKLJKO\LURQLFFKDSWHUWLWOHG´ &DQQLEDOLVP7RGD\µSURSRVHGWKHWHUPV´H[ SULPLWLYHµDQG´SHUIRUPDWLYHSULPLWLYHµWRGHVLJQDWHZKDWKHFDOOV´DVSHFLDOHWKQRORJLFDOFODVVRU 18 FDWHJRU\µ0DF&DQQHOOGHVFULEHVWKHVH´H[SULPLWLYHVµDVD´VLPSOHK\EULGIRUPµEHLQJ´IRUPHUO\ SULPLWLYH SHRSOH ZKRVH VSHFLDO DGDSWDWLRQ WR WKH FRQWLQJHQFLHV RI PRGHUQ H[LVWHQFH LV WR DFW SULPLWLYHIRURWKHUVµ WKURXJK VWDJLQJ WKHLU SDUWLFXODU FXOWXUHV LQ LQVWLWXWLRQDOL]HG VHWWLQJV )RU 0DF&DQQHOOVXFKFDQQLEDOLVPLVDIHDWXUHRIFDSLWDOLVPD:HVWHUQLGHRORJ\ZKLFKKDVDEDQGRQHGLWV DXWKHQWLFLW\LQWKHTXHVWRISURJUHVVDQGWHFKQRORJ\ 7DEOH0DF&DQQHOO·V6L[6WDJH$XWKHQWLFLW\ 6WDJH, *RIIPDQ·VIURQWUHJLRQ 6WDJH,, $IURQWUHJLRQEXWFRVPHWLFDOO\GHFRUDWHGZLWKUHPLQGHUVRI EDFNUHJLRQDFWLYLWLHV 6WDJH,,, $ IURQW UHJLRQ WKDW LV WRWDOO\ RUJDQLVHG WR ORRN OLNH D EDFN UHJLRQ 6WDJH,9 $KLJKO\PRGLILHGEDFNVWDJHWKDWLVRSHQWRYLVLWRUV 6WDJH9 $ EDFN VWDJH WKDW KDV EHHQ FOHDQHG XS RU DOWHUHG WR DFFRPPRGDWHRFFDVLRQDOYLVLWRUV 6WDJH9, *RIIPDQ·VEDFNUHJLRQ 6RXUFH0DF&DQQHOO 6WDJHG DXWKHQWLFLW\ DOVR SUHVHQWV WKH VSOLW EHWZHHQ VXEMHFW DQG UROH RU WKH UHDO DQG WKH UHSUHVHQWHGWKDWDFFRPSD QLHVSHUIRUPDQFHVRIFXOWXUHDQGRIWHQFDUULHVZLWKLWWKHLPSOLFDWLRQVRID ODSVHLQWLPH7RXULVPVLWXDWHVSHRSOHZLWKLQ]RQHVRIFRQWDFWZKLOHGHQ\LQJWKH´UHDOLW\µRIWKLV FRQWDFW 7D\ORU 7RXULVW DWWUDFWLRQV VXFK DV WKHPH SDUNV DQG IRON YLOO DJHV PDUNHW DXWKHQWLFLW\EXWLQIDFWWKZDUWWKHWRXULVWV·DVVXPHGGHVLUHIRUJHQXLQHH[SHULHQFHV)RUH[DPSOH HWKQLF GDQFH SHUIRUPDQFHV WDNH SODFH LQ D JLYHQ WRXULVP HQFRXQWHU DQG JHQHUDOO\ DOORZ IRU OLWWOH SHUVRQDOFRQWDFWEHWZHHQJXHVWVDQGHWKQLFKRV WV&XOWXUDOSHUIRUPDQFHWHQGVWRUHO\RQFDULFDWXUH DQGVWHUHRW\SH2IWHQWKHPRUHVWUXFWXUHGWKHHYHQWDQGWKHVKRUWHUWKHYLVLWWKHOHVVRSSRUWXQLW\ WRXULVWVKDYHWRPDNH´VLQFHUHµFRQWDFWZLWKORFDOFRPPXQLWLHV%HFDXVHWRXULVWVDUHGHQLHGFRQWDFW ZLWKWKHSHUIRUPHUVZKRIRUWKHPRVWSDUWUHPDLQRQVWDJHVXFKSHUIRUPDQFHVWUDQVPLWWKHRYHU VLJQLILFDWLRQ RI DQ LGHQWLW\ RI GLIIHUHQFH 7D\ORU 3DOPHU VXJJHVWHG WKDW FXOWXUDO WRXULVPVKRXOGEHYLHZHGDV´HQFODYHWRXULVPµLQZKLFKFURVV FXOWXUDOXQGHUVWDQGLQJLVGLVFRXUDJHG 19 LQIDYRXURIYR\HXULVPWKURXJKDFOHDUGHPDUFDWLRQEHWZHHQWKHWRXULVWVDQGORFDOVWKHIURQWVWDJH DQGEDFNVWDJH7KXVDXWKHQWLFLW\VKRXOGEHFRQWUDVWHGZLWKWKHH[SHULHQFHDVVRFLDWHGZLWKYLVLWVWR FRPPHUFLDODWWUDFWLRQVUHFRQVWUXFWHGVLWHVDQGRWKHUDUWLILFLDORUFRQWULYHGPDQLIHVWDWLRQVRIFXOWXUH 7KHVHDUFKIRUWKHDXWKHQWLFFXOWXUDOH[SHULHQFHKDVEHHQGHVFULEHGDVWKHVHDUFKIRU´WKHXQVSRLOHG SULVWLQHJHQXLQHXQWRXFKHGDQGWUDGLWLRQDOµ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·V VHDUFK IRU DXWKHQWLFLW\ 0DF&DQQHOO 7RXULVPLVVHHQDVDSHUSHWXDOTXHVWIRUWKHDXWKHQWLFZKHUH´WKHGLVWLQFWLRQEHWZHHQWKHDXWKHQWLF DQG WKH LQDXWKHQWLF WKH QDWXUDO DQG WKH WRXULVW\ LV DSRZHUIXOVHPLRWLFRSHUDWRUZLWKLQWRXULVPµ &XOOHUS 2DNHV IXUWKHUDUJXHGWKDWFXOWXUDOWRXULVPLVWKH´PLVSODFHGVHDUFKIRU DXWKHQWLFLW\µ DQG WKDW LW UHSUHVHQWV D ´IDOVHµ FRQFHSW LRQ RI PRGHUQLW\ 0DF&DQQHOO S VXPPDULVHVWKHUHODWLRQVKLSEHWZHHQWRXULVPPRGHUQLW\DQGDXWKHQWLFLW\LQWKHIROORZLQJSDVVDJH )RUPRGHUQVUHDOLW\DQGDXWKHQWLFLW\DUHWKRXJKWWREHHOVHZKHUHLQRWKHUKLVWRULFDO SHULRGVDQGRWKHUFXOWXUHV LQSXUHUVLPSOHUOLIHVW\OHV,QRWKHUZRUGVWKHFRQFHUQV RIPRGHUQVIRU´QDWXUDOQHVVµWKHLUQRVWDOJLDDQGWKHLUVHDUFKIRUDXWKHQWLFLW\DUHQRW PHUHO\FDVXDODQGVRPHZKDWGHFDGHQWWKRXJKKDUPOHVVDWWDFKPHQWVWRWKHVRXYHQLUV RIGHVWUR\HGFXOWXUHVDQG GHDGHSRFKV7KH\DUHDOVRFRPSRQHQWVRIWKHFRQTXHULQJ VSLULWRIPRGHUQLW\WKHJURXQGVRILWVXQLI\LQJFRQVFLRXVQHVV 7KHWHUP´FRPPRGLILFDWLRQµZDVFRLQHGWRUHIOHFWDSDWWHUQRIFRPPHUFLDOL]HGWRXULVPE\ SURGXFWV HJDLUSRUWDUWIDNHHWKQLFVRX YHQLUV &RPPRGLILFDWLRQLVWKHSURFHVVE\ZKLFKREMHFWV DQGDFWLYLWLHVFRPHWREHHYDOXDWHG SULPDULO\LQWHUPVRIWKHLU H[FKDQJHYDOXHLQWKHFRQWH[WRIWUDGH 20 %HVW&RKHQ'XSUH LQDGGLWLRQWRDQ\ XVHYDOXHWKDWVXFKFRPPRGLWLHVPLJK W KDYH%DXGULOODUG LQWURGXFHGRQHRWKHUYDOXHHPEHGGHGLQPRGHUQFRPPRGLWLHV VLJQYDOXH ZKLFKLVDPDQXIDFWXUHGVLJQLILHU7RXULVPDVFRPPRGLW\LVEHVWJUDVSHGDVDQH[SUHVVLRQRIWKH ´VHPLRWLFVRIFDSLWDOLVWSURGXFWLRQµ 0DF&DQQHOOS 7RXULVWLFFRQVXPSWLRQLV´VLJQ GULYHQµDQGPHGLDGULYHQVXEMHFWWRWKHGLFWDWHVRIFRPPRGLW\H[FKDQJHDQGFRQVXPSWLRQSDWWHUQV :DWVRQDQG.RSDFKHYVN\ 7KXVWKHFRPPRGLILFDWLRQRIWRXULVPKDVEHHQFULWLFL]HGDVWKH ´EDVWDUGL]DWLRQµDQG ´SROOXWLRQµRISUHYLRXVO\DXWKHQWLFHWKQLFFXOWXUHVIRUWKHSXUSRVHRIWRXULVWLF GLVSOD\ :RRG 7KHFRPPRGLILFDWLRQDQGPRGHUQL]DWLRQSODFHWUDGLWLRQDQGDXWKHQWLFLW\LQ MHRSDUG\ 0RUH VSHFLILFDOO\ WRXULVP·V WHQGHQF\ WR ´UHSURGXFHµ FXOWXUH LQ VWD JHG VHWWLQJV WR SURGXFH´H[SULPLWLYHVµLVLGHQWLILHGDVDPDMRUFRQWULEXWRUWRWKLVGDQJHU 7D\ORU 7RXULVWLF HWKQLFLW\ LQ RWKHU ZRUGV LV SKRQH\ HWKQLFLW\ 2IWHQ FXOWXUDO DQG HWKQLF WRXULVP DUH VHHQ DV ´GHYHORSPHQW ZKLFK KDV WKH SRZHU WR GL OXWH XQLTXH DQG DXWKHQWLF WUDGLWLRQV ZLWK VWDQGDUGLVHG VWHUHRW\SHVWDLORUHGWRWKHH[RWLF\HDUQLQJVRIWKH:HVWHUQWUDYHOOHUµ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´DUHGKHUULQJµ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´DXWKHQWLFLW\µ LV D VRFLDOO\ FRQVWUXFWHG FRQFHSW DQG LWV VRFLDO FRQQRWDWLRQLVQRWJLYHQEXWLV´QHJRWLDEOHµ$XWKHQWLFLW\DQGIDOVHQHVVDUHQRWDGLFKRWRPRXVSDLU RIFRQFHSWV7KHTXHVWIRUDXWKHQWLFLW\VKRXOGEHMXGJHGDJDLQVWYDU\LQJW\SHVRIYLVLWRUSURILOHV FI H[SHULPHQWDOYLVLWRUVH[SHULHQWLDOYLVLWRUVUHFUHDWLRQDOYLVLWRUVDQGGLYHUVLRQDU\YLVLWRUV +HUEHUW FRQFOXGHGIURPFDVHVWXGLHVLQ(XURSHWKDWWRXULVWVXVXDOO\GHVLUHWRH[SHULHQFHWKHLURZQ FRQFHSWVRIKLVWRU\VXFKDVKHULWDJHDQGLQGLJHQRXVD UWVQRWQHFHVVDULO\ZKDWLVIDFWXDO+HUEHUW IXUWKHUVXJJHVWHGWKDW´LIWKHH[SHULHQFHLVDXWKHQWLFWRWKHYLVLWRUWKDWLVVXIILFLHQWµ S DQG´LI YLVLWRUVJDLQDPHDQLQJIXOH[SHULHQFHWKDWLVDXWKHQWLFLW\ZKDWHYHULWVJURXQGLQJLQUHDOLW\µ S 22 +RZHYHULWLVLPSRUWDQWIRULQWHUSUHWDWLRQWREHDVKLVWRULFDOO\DFFXUDWHDVSRVVLEOHWRKHOSHOLPLQDWH YLVLWRUV· PLVFRQFHSWLRQV SUH MXGJHPHQWV DQG ELDVHV 7KHUHIRUH VRPH LQGLJHQRXV VRFLHWLHV PD\ VHHNWRXVHWRXULVPDVDPHDQVRIUHLQIRUFLQJWKHLUXQ LTXHQHVVWRERWKWKHPVHOYHVDQGWRWKHWRXULVWV 5\DQ $Q H[DPSOH RI WKLV FDQ EH IRXQG LQ 6W -DFREV 2QWDULR ZKHUH WKH 0HQQRQLWH FRPPXQLW\KDVHVWDEOLVKHGDVPDOOLQWHUSUHWDWLYHFHQWUHZKLFKSRUWUD\VWKHKLVWRU\RIWKH0HQQRQLWH PRYHPHQWIURPLWV(XURSHDQRULJLQV7KHFHQWUHVHUYHVWRLQWHUSUHWWKHFRPPXQLW\·VFXOWXUHIRU WKHWRXULVWLQDPDQQHUWKDWWKH0HQQRQLWHVZLVKWRSRUWUD\,WVHHNVWRHVWDEOLVKDQHPSDWK\RQWKH SDUW RI WKH WRXULVW IRU WKH FRPPXQLW\ DQG WR JHQHUDWH WKH XQGHUVWDQGLQJ RI GLIIHUHQW SUDFWLFHV WKHUHE\HQKDQFLQJDXWKHQWLFLW\ :DQJ FDWHJRULVHG WKUHH W\SHV RI DXWKHQWLFLW\ LQ WHUPV RI WRXULVW H[SHULHQFHV ´REMHFWLYHDXWKHQWLFLW\µUHIHUVWRWKHDXWKHQWLFLW\RIRULJLQDODQGDXWKHQWLFH[SHULHQFHVLQWRXULVP HTXDWHG WR DQ HSLVWHPRORJLFDO H[SHULHQFH LH FRJQLWLRQ RI WKH DXWKHQWLFLW\ RI RULJLQDOV ´FRQVWUXFWLYH DXWKHQWLFLW\µ UHIHUV WR WKH DXWKHQWLFLW\ SURMHFWHG RQWR WRXUHG REMHFWV E\ WRXULVP SURGXFHUVLQWHUPVRIWKHLULPDJHU\H[SHFWDWLRQVSUHIHUHQFHVEHOLHIVS RZHUVHWF7KHDXWKHQWLFLW\ RI WRXUHG REMHFWV LV LQ IDFW V\PEROLF DXWKHQWLFLW\ DQG ´H[LVWHQWLDO DXWKHQWLFLW\µ UHIHUV WR D SRWHQWLDOH[LVWHQWLDOVWDWHRIEHLQJWKDWLVWREHDFWLYDWHGE\WRXULVWDFWLYLWLHV([LVWHQWLDODXWKHQWLFLW\ FDQKDYHQRWKLQJWRGRZLWKWKHDXWKHQWLFLW\RIWRXUHGREMHFWV7KXVWRXULVWTXHVWVIRUDXWKHQWLFLW\ YDU\IURPRQHSHUVRQWRDQRWKHU2WKHUFDVHVWXGLHVDOVRVXJJHVWWKDWWKHFRQFHSWRIIURQWDQGEDFN UHJLRQVLVQRWDVGLVWLQFWLYHDQGLPSRUWDQWDVRULJLQDOO\DQWLFLSDWHG 6WDQWRQ:DOODQG2VZDOG $XWKHQWLFLW\FDQEHH[SHULHQFHGZKHQWRXULVWVPHHW´DXWKHQWLFµSHRSOHLQFHUWDLQFRQWH[WV WKDWDUHQRWQHFHVVDULO\UHODWHGWRDIURQWUHJLRQRUDEDFNUHJLRQVHWWLQJ &RPPRGLILFDWLRQGRHVQRWQHFHVVDULO\GHVWUR\ WKHPHDQLQJRIFXOWXUDOSURGXFWVHLWKHUIRU WKH ORFDOV RU IRU WKH WRXULVWV &RKHQ S 0F,QWRVK DQG 3UHQWLFH FODLPHG WKDW FRPPRGLILFDWLRQVKRXOGEHMXGJHGDWWZRGLIIHUHQWOHYHOV$WDVXSHUILFLDOOHYHOFRPPRGLILFDWLRQRI 23 ´SDVWQHVVµ KDV EHHQ GHVFULEHG DV ´UHWURFKLFµ 6DPXHO DQ HPSKDVLV RQ VW\OH UDWKHU WKDQ VXEVWDQFHDQGSOD\LQJZLWKWKHLGHDRISHULRGPL[LQJSDVWQHVVDQGSUHVHQWQHVV$WDGHHSHUOHYHO FRPPRGLILFDWLRQRISDVWQHVVFDQEHLQWHUSUHWHGDVPDUNLQJQHHGVIRULGHQ WLW\DQGWKHILQGLQJRIWKH WUXHVHOIWKURXJKWKHDSSURSULDWLRQRISDVWQHVV&XOWXUDODXWKHQWLFLW\FDQEHDIILUPHGE\LQGLYLGXDO YLVLWRUV WKURXJK WKH HQFRGLQJ RI DQ H[SHULHQFH ZLWK WKHLU RZQ SHUVRQDO PHDQLQJV )RUH[DPSOH VWDJHG 0DRUL ULWXDO DQG WUDGLW LRQV IRU WRXULVWV UHIOHFW FKDUDFWHULVWLFV RI 1HZ =HDODQG·V HDUO\ DQWKURSRORJ\VXFKWKDW´LI>ULWXDODQGWUDGLWLRQV@ZHUHQ·WIRUWRXULVPKDOIRI0DRULFXOWXUHZRXOGEH JRQHµ 6KDQQRQS ,QIDFWWKHFRPPRGLILFDWLRQRIWRXULVWLFSURGXFWLRQVDSS HDUVDVD NLQGRI´VDOYDJHµ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uthentification in the Context of Cultural Tourism Governments Tourism Businesses Visitors Ethnic C ommunities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´VDFULILFLDOUHVRUWVµ OLNH3DWWD\DRQ7KDLODQG·VHDVW FRDVWRU.XWDLQ%DOL LQWRZKLFKWRXULVWVZKRGRQRWVHHNDQH[SHULHQFHRI´GHHS TXDOLW\µDUH SRXUHGKHOSWRSURWHFWRWKHUDUHDV +LWFKFRFN.LQJDQG3DUQZHOO ,QPRVWFDVHVHWKQLFFXOWXUDOFKDQJHVDUHMXVWLILHGE\WKHVRFLDOV\VWHPVRIKRVWFRXQWULHV9LUWXDOO\ DOO FRXQWULHV LQ WKH $VLD 3DFLILF UHJLRQ KDYH PDGH ´FXOWXUHµ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´QDWLRQDOLWLHVµPRVWO\UHVLGLQJLQRIILFLD OO\GHVLJQDWHGDXWRQRPRXVUHJLRQVLQWKHSHULSKHU\ RIWKHFRXQWU\ZKLFKUDQJHLQJHRJUDSKLFDOVFRSHIURPDYLOODJHWRDSURYLQFH 27 ,Q&KLQDHWKQLFPLQRULWLHVDUHDOVRSHULSKHUDOWRWKHQDWLRQDOFODVVV\VWHP0LQRULWLHVDUH RIWHQSHUFHLYHGDVEHLQJORZH UWKDQWKHORZHVWUDQNLQJZLWKLQGLYLGXDOVDVVLJQHGWRWKHERWWRPUXQJ RIWKHKLHUDUFK\LQDVWUDWLILHGVRFLHW\ 6ZDLQ +DUUHOO ODEHOOHGWKHVHHWKQLFPLQRULWLHV DV´SHULSKHUDOSHRSOHµVLQFHWKH&KLQHVHJRYHUQPHQWKDVIRUDORQJWLPHGHYHORS HGD´VWLJPDWL]HG LGHQWLW\µ (LGKHLP WRFUHDWHDVHQVHRIHWKQLFPLQRULWLHVDVEHLQJEDFNZDUGXQFLYLOL]HGGLUW\ VWXSLGDQGVRIRUWK(WKQLFPLQRULWLHVDUHJHQHUDOO\GHSLFWHGDVZRPHQ LHHURWLFSURPLVFXRXV KDYLQJQRW\HWOHDUQHGWKHSURSHU FLYLOLVHGPRUDOVRIVH[XDOUHSUHVVLRQ DVFKLOGUHQ LHFKLOGOLNHDQG GHVSHUDWHO\QHHGLQJFLYLOLVLQJHGXFDWLRQ DQGDVDQFLHQW LHSULPLWLYHXQFKDQJHGRUOLYLQJIRVVLOV +DUUHOO 7KH WHUP ´HWKQLFLW\µ DOVR LV GHILQHG EDVHG RQ FXOWXUDO GLVWD QFH IURP WKH +DQ &KLQHVH 2DNHV (WKQLF LGHQWLILFDWLRQ DQG UHJLRQDO DXWRQRP\ ZHUH QRW DERXW VHOI GHWHUPLQDWLRQEXWDERXWGHILQLQJUHJLRQVDQGWKHLULQKDELWDQWVDFFRUGLQJWRWKHLUEDFNZDUGQHVVDQG WKHQHHGIRUHFRQRPLFFXOWXUDODQGVRFLDOGHYHORSPH QW 6ROLQJHU (WKQLFPLQRULWLHVLQ&KLQD ´DUH H[SHFWHG WR XOWLPDWHO\ HYROYH LQWR DVVLPLODWHG PHPEHUV RI WKH PDMRULW\ SDWULDUFKDO VRFLDOLVW VRFLHW\µ 6ZDLQS 7KHUHIRUHDXWKHQWLFWUDGLWLRQLVLQWHUSUHWHGDV´DGRPLQDQWFXOWXUH·V H[SHFWDWLRQV RI D VXERUGLQDWH JURXS·V WUDGLWLRQVµ 2DNHV S DQG WKH &KLQHVH VWDWH FRQWLQXHVWRSOD\DIXQGDPHQWDOUROHLQGHFLGLQJHWKQLFLGHQWLW\ 7KHVWDWHLQ&KLQDVHUYHVDVDSURPRWHUUHJXODWRUDQGSXUYH\RURIFXOWXUDOIRUPVZKLOHDOVR YDOLGDWLQJ HWKQLF JURXS DZDUHQHVV DQG OHJDO ULJKWV 6ZDLQ 6WDWH SROLFLHV RQ WKH HWKQLF PLQRULWLHVFDQSRVLWLYHO\RUQHJDWLYHO\LQIOXHQFHWRXULVPGHYHORSPHQW5LFKWHU S DVVHUWV WKDW ´WRXULVP LV D KLJKO\ SROLWLFDO SKHQRPHQRQ WKH LPSOLFDWLRQV R I ZKLFK KDYH EHHQ RQO\ UDUHO\ SHUFHLYHGDQGDOPRVWQRZKHUHIXOO\XQGHUVWRRGµ 6WDWH SROLFLHV KDYH HYROYHG UHFHQWO\ )RU H[DPSOH FXOWXUDO WRXULVP LQ &KLQD KDVHYROYHG IURP ´D VHUYDQW RI VRFLDOLVW LGHRORJ\µ 6RILHOG DQG /L S WR ´D SDUDGH WR SRU WUD\ WKH IUXLWIXOQHVVRIHWKQLFFXOWXUHµ /LS 6ZDLQ GRFXPHQWHGWKHJUHDWFKDQJHVLQ 28 WKHUROHRIWKH6DQLPLQRULW\UHVLGHQWVRIWKH/XQDQ WRWKHSUHVHQWWLPH7KHFRXQW\ZDVRQFHSODFHG XQGHUKHDY\KDQGHGVWDWHFRQWUROXQWLOUHFHQWO\ ZKHQWKHJRYHUQPHQW´HQFRXUDJHGSULYDWH6DQLHQWHUSULVH«DQGSURPRWHG6DQLHWKQLFWRXULVPE\ XVLQJ H[RWLF LPDJHV RI 6DQL ZRPHQ LQ QDWLYH GUHVV IRU GLYHUVH SURGXFW DGYHUWLVHPHQWV DQG E\ PDUNHWLQJ 6DQL KDQGLFUDIWV LQ VWDWH VWRUHV WKURXJKRXW &KLQDµ 6ZDLQ S 2DNHV IRXQGWKDWWKH&KLQHVHJRYHUQPHQWZDQWVHWKQLFFXOWXUHWREHLQWHJUDWHGLQWRWKHVWDWH·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·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·V JRYHUQPHQWFRXOGQRW ILQG HQRXJK UHVRXUFHV WR SUHVHUYH DQG SURPRWH HWKQLF FXOWXUH 7KH JRYHUQPHQW GHFODUHG WKDW FXOWXUDOSROLFLHVPXVWILWZLWKHFRQRPLFSROLFLHV(WKQLFDXWRQRPRXVUHJLRQVQHHGWR´ILQGZD\VWR PDNH PRQH\ IURP WKHLU KHULWDJHµ /L 7KHUHIRUH FXOWXUDO WRXULVP LQ &KLQD LV FORVHO\ DVVRFLDWHGZLWKSROLWLFDOSROLF\DQGLVEHLQJXWLOL]HGE\WKHVWDWHIRUPRGHUQL]DWLRQ2DNHV WKURXJK UHVHDUFK LQ *XL]KRX &KLQD FRQFOXGHG WKDW LQ PRVW FDVHV WRXULVP EXVLQHVV EULQJV D VXEVWDQWLDO FKDQJHWRDQHWKQLFYLOODJH·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´JHQGHUHPSRZHUPHQWµ6DQLPH QDUHDOVRHPSOR\HGLQWRXULVPVHUYLFHDQGHQWHUWDLQPHQW MREVKRZHYHUWKHLUUROHVLQVXSSRUWLQJZRPHQ·VSURGXFWLRQRIWRXULVPJRRGVLQWKHLUKRXVHKROGV KDYH EHFRPH PRUH LPSRUWDQW )XUWKHU WKH SURVSHULQJ EXVLQHVV RI VHOOLQJ HWKQLF VRXYHQLUV KDV PRWLYDWHGPDQ\HWKQLFSHRSOHWRPRYHLQWRXUEDQFHQWUHV$SDWWHUQWKDWKDVVXUIDFHGLV´FLUFXODU 30 PLJUDWLRQµ7KLVRFFXUVZKHQHWKQLFPLQRULWLHVPRYHWRXUEDQFHQWUHVZLWKWKHLUJRRGVEXWQHHGWR UHWXUQWRUXUDODUHDVWRUHSOHQLVKVXSSOLHV (FRQRPLFGHYHORSPHQW LVDFULWLFDODVSHFWLQXQGHUVWDQGLQJWKHLPSDFWRIFXOWXUDOWRXULVP 3UHYLRXV UHVHDUFK LQ GHYHORSLQJ FRXQWULHV VXJJHVWV WKDW FRPPHUFLDOL]DWLRQ WKURXJK WRXULVP KDV UHVKDSHG WKH VRFLDO IDEULF RI PDQ\ HWKQLF PLQRULWLHV 6LQFH WKH HDUO\ V KXQGUHGV RI ´IRON FXOWXUH IHVWLYDOVµ RUJDQL]HG E\ ORFDO JRYHUQPHQWV KDYH EHHQ HVWDEOLVKHG LQ &KLQD+RZHYHUWKH RULJLQDOLQWHQWLRQVZHUHWRDWWUDFWFDSLWDO =KX 2DNHV S RQFHF\QLFDOO\GHVFULEHG WKHUROHRIHWKQLFWRXULVPLQ&KLQDDVDQ´HQWLFHPH QWµ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´HVFKHZ WKH FRPPHUFLDO KXVN VXUURXQGLQJ WKHLU VXEMHFWV RI VWXG\µ 6XFK DQ DUJXPHQW GRHV QRW VHHP WR EH VXSSRUWHG E\ HPSLULFDO LQYHVWLJDWLRQV VLQFH WRXULVW PRWLYDWLRQV DUH VR EURDG WKDW D FOHDU FXW GLVWLQFWLRQEHWZHHQWZRJURXSVLVXQOLNHO\ .DSODQ DUJXHG WKDW FXOWXUDO WRXULVWV VHHN WKH H[RWLF DQG DXWKHQWLF LQ DQ HIIRUW WR GLVSODFHWKHLQVWUXPHQWDOUDWLRQDOLVPWKDWKDVFRPHWRGRPLQDWHWKHLUOLIH6KHGHVFULEHGWKLVW\SHRI WRXULVW DV SRVVHVVLQJ ´D VSHFLILFDOO\ (XUR $PHULFDQ FXOWXUDO P\RSLD ZKR PDUNV VKLIWLQJ SHULSKHUDOLWLHVWKURXJKWUDYHOLQDZRUOGRIVWUXFWXUHGHFRQRPLFDV\PPHWULHVµ S :HLOHUDQG +DOO S VWDWHGWKDWFXOWXUDOWRXULVWVH[KLELW´DFRPPRQGHVLUHIRUDXWKHQWLFLW\LPPHUVLRQ LQ WKH FXOWXUDO DQGRU SK\VLFDO HQYLURQPHQW SXUVXLQJ HQ YLURQPHQWDO DQG H[SHULHQWLDO TXDOLW\µ +XJKHV SURSRVHGIURPDEURDGHUSHUVSHFWLYHWKDWWKHUHDUHWZRSRVVLEOHPDUNHWVHJPHQWV IRUHWKQLFWRXULVP)LUVWPHPEHUVRIWKH SRVWLQGXVWULDOVHJPHQWDUHOLNHO\WREHVHQVLWLYHWRLPSDFWV RQWKHKRVWSRSXODWLRQDQGDUHFRQFHUQHGZLWKEHKDYLQJUHVSRQVLEO\LQHWKQLFFRQWDFWVLWXDWLRQV 6HFRQG PHPEHUV RI WKH SRVWPRGHUQ VHJPHQW HQMR\ FRQWULYHG VSHFWDFOHVZKLOHUHPDLQLQJDZDUHRI WKHLULQDXWKHQWLFLW\7KHSRVW PRGHUQVHJPHQWVHHPVWRFDUHOHVVIRUWKHRULJL QVRIDQDWWUDFWLRQDV ORQJDVWKHYLVLWLVDQHQMR\DEOHRQH 'DQQ 0RVFDUGRDQG3HDUFH LQDQHPSLULFDO 32 VWXG\ DW DQ DERULJLQDO FXOWXUDO SDUN LQ $XVWUDOLD LGHQWLILHG IRXU SRUWIROLRV RI HWKQLF WRXULVWV WKH HWKQLF WRXULVP FRQQHFWLRQ JURXS W KH SDVVLYH FXOWXUDO OHDUQLQJ JURXS WKH HWKQLF SURGXFWV DQG DFWLYLWLHV JURXS DQG WKH ORZ HWKQLF WRXULVP JURXS 7KH VWXG\ SRLQWV RXW WKDW LW LV QHFHVVDU\ IRU HWKQLF JURXSV ZKR VHHN WR XVH WRXULVP WR WKHLU DGYDQWDJH WR ILQG RXW KRZ SRWHQWLDO PDUNHWV DUH OLNHO\WRUHVSRQGWRSURGXFWVWKDWWKH\GHYHORS &XOWXUDO WRXULVWV PD\ SXUVXH WKH DXWKHQWLFLW\ RI WKH KRVW VRFLHWLHV DV D SULPH PRWLYDWLRQ KRZHYHUWKHUHPD\DOVREHRWKHUPRWLYDWLRQVLQIOXHQFLQJWKHVHWRXULVWV,QPRVWFRXQWULHVPDVV WRXULVP LV D GRPLQDQW PDUNHW ´7\SLFDOµ YLVLWRUV JHQHUDOO\ SDUWLFLSDWH LQ SDFNDJH WRXUV ZKLFK LQFOXGH D VHULHV RI UHFUHDWLRQDO DFWLYLWLHV VXFK DV VLJKWVHHLQJ VKRSSLQJ DQG ZDWFKLQJ FXOWXUDO SHUIRUPDQFHV 7KH\ XVXDOO\ ODFN WKH WLPH DQG WKH GHSWK RI H[SHULHQFH WR XQGHUVWDQG W KH PRUH FRPSOH[DQGLQWULFDWHDVSHFWVRILQGLJHQRXVFXOWXUH7KHUHIRUHLWPD\EHZURQJWRDVVXPHWKDWDQ\ WRXULVWYLVLWLQJFXOWXUDOWRXULVWDWWUDFWLRQVVXFKDVDQHWKQLFIRONYLOODJHVKRXOGEHFDOOHGD´FXOWXUDO WRXULVWµ7KHGHILQLWLRQRI´FXOWXUDO WRXULVWVµ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´PDQXIDFWXUHGµURXWLQHV7KLUGHWKQLFFORWKLQJ EHFDPHDEXVLQHVVXQLIRUP´6DQLZRPHQPD\ZHDUHWKQLFGUHVVRYHUPRGHUQFORWKHVZKHQVHOOLQJ WRXULVWJRRGV,IWKH\DUHLGHQWLILDEOHDV6DQLLWLVHDVLHUWRVHOOµ 6ZDLQS 0HDQZKLOH WUDGLWLRQDOHWKQLFVRXYHQLUVEHFDPHDEOHQGRILQGLJHQRXVDQG+DQHOHPHQWV,WLVHYLGHQWIURPWKLV H[DPSOHWKDWDJUDGXDOZHDNHQLQJRIWUXHWUDGLWLRQDOFXOWXUHLVOLNHO\WRRFFXUZLWKJURZLQJWRXULVP ZLWKLQHWKQLFPLQRULW\OLIHVW\OHV 'RHVFXOWXUDOWRXULVPFKDQJHHWKQLF´DXWKHQWLFµFXOWXUHLQ&KLQD",QZKDWZD\VDQGWRZKDW GHJUHH" 7KH OLWHUDWXUH RQ &KLQHVH HWKQLF PLQRULWLHV SRODULVHV WKH LPSDFWV RI WRXULVP RQ FXOWXUDO FKDQJHV (EHUKDUG7KHURX[2DNHV6ZDLQ )RU H[DPSOH(EHUKDUG FODLPHGWKDWZLWKWRXULVPGHYHORSPHQW&KLQD·VPLQRULWLHVZRXOGHLWKHUEHDVVLPLODWHGRUEHFRPHD OLYLQJPXVHXP7KHURX[ S SHVVLPLVWLFDOO\VXJJHVWHGWKDWWRXULVPZRXOGHYHQWXDOO\WXUQ WKH&KLQHVHPLQRULWLHVLQWR´VR PHZKHUHEHWZHHQKLOOELOOLHVDQG]RRDQLPDOVµ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´RQH DVSHFW RI DQ RQJRLQJ FXOWXUDO UHYLYDO« LQFOXGLQJ ODQJXDJH SURJUDPV OLQHDJH DQG FRP PXQLW\EDVHG ULWXDO LQWHQVLILFDWLRQ HWKQLF DUWV SURGXFWLRQ QDWLRQDO UHVHDUFKDQGORFDOFXOWXUHRIILFHµ S 2DNHV REVHUYHG WKDW LQ &KLQD FXOWXUDO WRXULVP FRPELQHV WZR YHU\ GLIIHUHQW SURFHVVHVWRLQIOXHQFHHWKQLFLGHQWLW\VLJQLILFDQWO\ RQHLVWKHSURFHVVRIFRPPHUFLDOHFRQRPLFDQG VRFLDOLQWHJUDWLRQLQKHUHQWLQWRXULVPGHYHORSPHQWWKHRWKHULQYROYHVVWDWHSROLFLHVUHJDUGLQJHWKQLF PLQRULW\FXOWXUHDQGLWVSUHVHUYDWLRQ6WDWHFXOWXUDOSUHVHUYDWLRQWHQGVWRIRVVLOL]HFHUWDLQDVSHFWVR I FXOWXUDOWUDGLWLRQGUDZVGLVWLQFWERXQGDULHVDURXQGORFDOFXVWRPVDQGIL[HVWKHVHERXQGDULHVLQWLPH DQGVSDFH6XFKD´SULPRUGLDOµ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·VZRUNILYHSDLUVRISDUDGR[HV DUHSURSRVHG LQ WKLV WKHVLV LQ RUGHU WR EHWWHU XQGHUVWDQG WKH LQWHUUHODWLRQVKLSV EHWZHHQ FXOWXUH HFRQRPLFV SROLWLFVDQGDXWKHQWLFLW\ 7DEOH 7DEOH)LYH3DLUVRI3DUDGR[HV 1RQ&RPPHUFLDOL]DWLRQ &RPPRGLWL]DWLRQ (FRQRPLF'HYHORSPHQW &XOWXUDO3UHVHUYDWLRQ &XOWXUDO(YROXWLRQ 0XVHXPLILFDWLRQ (WKQLF$XWRQRP\ 6WDWH5HJXODWLRQ 0DVV7RXULVP'HYHORSPHQW 6XVWDLQDEOH&XOWXUDO7RXULVP 6RXUFHPRGLILHGIURP6ZDLQ·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´PXVHXPLILFDWLRQµ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• 1DWLRQDO • 3URYLQFLDO • /RFDO 9LVLWRUV 7RXULVP%XVLQHVVHV • 'LUHFWRUV $XWKHQWLILFDWLRQ • 7RXULVWV • 0DQDJHUV (WKQLF&RPPXQLWLHV •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·DQGWKHWRXULVWV·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´UHDOµFXOWXUH$VQRWHGSUHYLRXVO\LWLVLPSRUWDQW WR XQGHUVWDQG WKH SHUFHSWLRQV RI DXWKHQWLFLW\ IURP WRXULVWV· SHUVSH FWLYHV 7KH WRXULVWV·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·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·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·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·V YDVW SDQRUDPD UXQV WKH JDPXW IURP WRZHULQJ PRXQWDLQVWRIHDWXUHOHVVSODLQV7KHWHUUDLQGHVFHQGVDFURVVWKHSODQHWIURP7LEHW·V´URRIRIWKH ZRUOGµLQWKHZHVWGRZQWKURXJKWKH,QQHU0 RQJROLD3ODWHDXDQGHDVWWRWKHSODLQVRIWKH 5LYHUYDOOH\,QWKHVRXWKZHVWWKH JRUJH UDSLGV ZDWHUIDOOV XQGHUJURXQG FDYHUQV DQG OLPHVWRQH SLQQDFOHV PDNLQJ LW RQH RI WKH FRXQWU\ VPRVWVSHFWDFXODUUHJLRQV,QODQGIHDWXUHVLQFOXGHWKH7DNODPDNDQ'HVHUWVKLIWLQJVDOWODNHV DQGWKH7XUSDQ'HSUHVVLRQ &KLQD VKRWWHVWUHJLRQDQGNQRZQDVWKH2DVLVRI)LUH 0HOWLQJVQRZ IURPWKHPRXQWDLQVRIZHVWHUQ&KLQDDQGWKH7LEHWDQ3ODWHDXSURYLGH VWKHKHDGZDWHUVIRUPDQ\RI WKHFRXQWU\ VPDMRUWUDGHURXWHVWKH *LYHQ &KLQD·V VL]H LW·V RQO\ WR EH H[SHFWHG WKDW LWV SODQW DQG DQLPDO OLIH LV GLYHUVH 8QIRUWXQDWHO\PXFKRIWKHFRXQWU\·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·VFDSLWDOLVWSDVWZHUHGHVWUR\HG1RWXQWLOQHZOHDGHU'HQJ;LDRSLQJGLG&KLQD VHW D FRXUVH WRZDUGV HFRQRPLF UHFR QVWUXFWLRQDOWKRXJKSROLWLFDOUHIRUPZDVDOPRVWQLO*HQHUDO GLVVDWLVIDFWLRQZLWKWKH3DUW\VRDULQJLQIODWLRQDQGLQFUHDVHGGHPDQGVIRUGHPRFUDF\KDYHOHGWR ZLGHVSUHDG VRFLDO XQUHVW HSLWRPL]HG E\ WKH GHPRQVWUDWLRQV RI WKDW UHVXOWHG LQ WKH EORRG\ 7LDQDQPHQ6TXDUHPDVVDFUH (FRQRP\ &KLQD·V SRVW0DR HFRQRPLF UHIRUPV KDYH JHQHUDWHG UDSLG DQG VXVWDLQHG HFRQRPLF JURZWK XQSUHFHGHQWHGULVHVLQUHDOLQFRPHDQGOLYLQJVWDQGDUGVDQGKDYHWUDQVIRUPHGZKDWZDVRQFHRQH RIWKHZRUOG·VPRVWLQVXODUHF RQRPLHVLQWRDPDMRUWUDGLQJQDWLRQ :DOGHU 6LQFHWKH &KLQHVHHFRQRP\KDVJURZQDWDQDQQXDOUDWHRIFORVHWRSHUFHQW'XULQJWKHODVWWZRGHFDGHV &KLQDKDVGRXEOHGLWVSHUFDSLWDLQFRPHHYHU\WHQ\HDUVIDVWHUWKDQDQ\RWKHUFRXQWU\G XULQJWKHODVW WKUHH FHQWXULHV $VLD 'HYHORSPHQW %DQN )RU PDQ\ &KLQD·V WUDQVLWLRQDO HFRQRP\ LV DQ LQWULJXLQJDQRPDO\DWUDQVLWLRQKHUDOGHGDVGLIILFXOWDQGSDLQIXOKDVVSDUNHGDQHFRQRPLFERRP$ JUDGXDO UDWKHU WKDQ DQ DEUXSW WUDQVLWLRQ WR D PD UNHW HFRQRP\ LV RFFXUULQJ ZLWK SXEOLF LQGXVWU\ SURWHFWHGUDWKHUWKDQVXEMHFWWRSULYDWLVDWLRQ &KLQD·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·V ORQJ KLVWRU\ RI WRXULVP LV WKH SODFH RI FXOWXUH DQG WKH WUDGLWLRQVRIKHULWDJHWRXULVPDQGSLOJULPDJH 6RILHOGDQG/L +RZHYHUWRXULVPGHYHORSPHQW KDV JRQH WKURXJK D ZLQGLQJ URDG LQ PRGHUQ &KLQD :KHQ WKH &RPPXQLVW 3DUW\ WRRN SRZHU LQ ERWK WUDGLWLRQDO FXOWXUH DQG IUHHGRP WR WUDYHO ZHUH VXSSUHVVHG R IWHQ UXWKOHVVO\ DV 0DR =HGRQJ SXUVXHG KLV YLVLRQ RI ´WRWDOLVWLF LFRQRFODVPµ /LQ S 2QO\ ZLWK WKH DGYHQW RI 'HQJ;LDRSLQJ·V´RSHQGRRUµ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·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´7KH6LON5RDG7RXUµ´7KH6KHUSD7UDLOµ DQG´7KH1RUWK:HVW0LQRULW\&XOWXUDO7RXUµ :HL $Q´(WKQLFFXOWXUHERRPµKDVEHFRPH D GULYLQJ IRUFH IRU WKH HFRQRPLF GHYHORSPHQW RI WKH HWKQL F PLQRULWLHV· UHJLRQV +RZHYHU WKH WHQVLRQ EHWZHHQ WKH FRQIOLFWLQJ REMHFWLYHV RI PRGHUQLVDWLRQ DQG WKH PDLQWHQDQFH RI WUDGLWLRQDO FXOWXUHILQGVDGLIIHUHQWH[SUHVVLRQLQWKHRSSRVLWLRQRIPLQRULWLHVWRFHQWUDOJRYHUQPHQWSROLFLHVRQ WRXULVPGHYHORSPHQW 6RILHOGDQG/L $QXPEHURISROLWLFDODQGHWKLFDOLVVXHVDUHDWVWDNH VXFKDVSROLWLFDOGRPLQDWLRQIRUFHGDVVLPLODWLRQODFNRIHPSRZHUPHQWGLVFULPLQDWLRQH[SORLWDWLRQ SUDFWLVHGE\WKHPDMRULW\VRFLHW\HFRQRPLFLPSRYHULVKPHQWDQGFXOWXUDOGHJU DGDWLRQ)XUWKHUORFDO JRYHUQPHQWV PD\ SXUVXH ´DXWKHQWLFµ WRXULVP SURGXFWV DQG PDUNHW WKH ´H[RWLFµ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´ 7LDQ\D+DLMLDRµ WKHHQGRI+HDYHQDQGVHD EHFDXVHLWLVIDUIURPWKHKHDUWRI&KLQD,WKDVDPRQVRRQWURSLFDOFOLPDWHZLWKDQQXDODYHUDJH WHPSHUDWXUHVRI°&WR°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´WKHJDWHRI KHOOµ$FFRUGLQJWRKLVWRULFDOUHFRUGVRQO\WRXULVWVFDPHWR+DLQDQRIWKHLURZQYROLWLRQGXULQJ WKHHQWLUH6RQJ GXULQJZLQWHUQRZDGD\V 6WRUH\ HWDO $IWHUWKH&RPPXQLVW3DUW\WRRNSRZ HULQ+DLQDQ,VODQGZDVXVHGDVDQDY\EDVHWR FRQWDLQ 6RXWKHDVW $VLD DQG VXUURXQGLQJ FRQWHQWLRXV WHUULWRULHV +DLQDQ·V GHYHORSPHQW UHPDLQV VXEVWDQWLDOO\EHKLQGRWKHUDUHDVRIVRXWKHUQFRDVWDO&KLQD6RPHDUJXHWKDWWKLVUHVXOWHGIURPWKH ´FRORQLDO SROLF\µ RI WKH PDLQODQG WRZDUG WKH LVODQG LQ WKH SUH UHIRUP SHULRG DV DQ RXWSRVW RI QDWLRQDOGHIHQVHDQGDVRXUFHRIGRPHVWLFUXEEHUSURGXFWLRQGHYHORSHGDIWHUWKH86 OHGHPEDUJRHV RIWKHHDUO\V &DGDULR HWDO )XUWKHU+DLQDQGLGQRWDWWUDF WVLJQLILFDQWLQYHVWPHQWLQ QRQDJULFXOWXUDO DFWLYLWLHV (YHQ DIWHU &KLQD·V UHIRUPV EHJDQ LQ WKH FHQWUDO JRYHUQPHQW·V OLPLWHGVXSSRUWIRULQIUDVWUXFWXUHGHYHORSPHQWLQWKHSURYLQFHPDGH+DLQDQ·VODJLQLQGXVWU\DQG LQIUDVWUXFWXUHGLIILFXOWWRRYHUFRP H 7KHHQWLUHLVODQGRI+DLQDQZDVGHVLJQDWHGD6SHFLDO(FRQRPLF=RQH 6(= LQ7KH 6(=DOORZHG+DLQDQWRRIIHUIRUHLJQLQYHVWRUVDQDWWUDFWLYHSDFNDJHRIWD[H[HPSWLRQVGXW\IUHH VWDWXVIRUSURGXFWLRQLQSXWVHWF,QDGGLWLRQ%HLMLQJGHFODUHGL WVLQWHQWLRQWRPDNH+DLQDQDVSHFLDO DUHDWKDWZRXOGJREH\RQGWKHRWKHU6(=VLQV\VWHPUHIRUP,WZDVWRKDYHD´VPDOOJRYHUQPHQW DQG ODUJH VRFLHW\µ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´YLVDLVVXHGRQVSRWµIRUWHPSRUDU\YLVLWRUV &DGDULR HWDO 7KLVUHJXODWLRQVLJQLILFDQWO\LQFUHDVHVDFFHVVLELOLW\WR WKHLVODQGDQGLVSRWHQWLDOO\DGYDQWDJHRXVWRWKH GHYHORSPHQWRILQWHUQDWLRQDOWRXULVP (FRQRP\ 'XHWRWKHDGYDQWDJHRXVSUHIHUHQWLDOSROLFLHVPXFKDWWHQWLRQKDVEHHQGUDZQWR+DLQDQIURPERWK KRPHDQGDEURDGFUHDWLQJJUHDWFKDQJHVDQGUHPDUNDEOH HFRQRPLFDFKLHYHPHQWV$VFDQEHHQVHHQ IURP)LJXUHDWWKHHQGRIWKH*'3ZDV50%ELOOLRQ &ELOOLRQ DQLQFUHDVHRI FRPSDUHGWR50%ELOOLRQ &ELOOLRQ LQ 6RXUFH6WDWLVWLFV%XUHDXRI+DLQDQ +RZHYHU+DLQDQ·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ercentage 10 GDP (RMB 1 billion) 0 Annual Growth Rate with 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 Account of Price Index Ye ar 7KHUHIRUHDIWHUH[SHULHQFLQJWKHPRVWSURVSHURXVJURZWKLQWKHSHULRGRI WKH EXEEOHEXUVWDQGDIUDJLOHHFRQRP\KDVVLQFHVHHQDPXFKUHGXFHGDQQXDOJURZWKUDWH7KHOHJDF\ RIUHDOHVWDWHVSHFXODWLRQOHI WQXPHURXVVKHOOVRIXQILQLVKHGFRQVWUXFWLRQ7KHHIIHFWVRIWKHEXEEOH HFRQRP\ KDYH OLQJHUHG OHDYLQJ DQ HFRQRPLF JURZWK UDWH WKDW ZDV UDQNHG WKH VHFRQG ORZHVW QDWLRQZLGHLQ +DLQDQ'DLO\ 5HJDUGLQJ HFRQRPLF VWUXFWXUH SULPDU\ LQGXVWU\ EHQHIL WV D ORW IURP WKH WURSLFDO FOLPDWH $JULFXOWXUH LV VWLOO WKH PDLQVWD\ RI +DLQDQ·V HFRQRP\ DQG DFFRXQWV IRU RI +DLQDQ·V *'3 &DGDULR HW DO :KLOH WKH PDLQ FURSV DUH SODQWDWLRQ UXEEHU VPDOOKROGHU ULFH SDGGLHV DQG YHJHWDEOHSORWVJURZWKLQWKH ODVWGHFDGHKDVEHHQFRQFHQWUDWHGLQFRPPHUFLDOFURSV FRIIHHDQG WHDEDQDQDVSHSSHUVXJDUFDQHDQGWURSLFDOPHGLFDOKHUEDOV)RUH[DPSOHDSSUR[LPDWHO\ RIDIDUPHU·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´8WVDWµ DQG ,QGRQHVLDQ &KLQHVH PLQRULWLHV 3DQJ 7KH /L PLQRULW\ KDG QR ZULWWHQ VFULSW ,WV VSRNHQ ODQJXDJH EHORQJVWRWKH&KLQHVH 7LEHWDQODQJXDJHIDPLO\ :X $QHZ URPDQLVHGVFULSWZDVFUHDWHGIRU 52 WKH /L HWKQLF JURXS LQ ZLWK WKH JRYHUQPHQW·V KHOS KRZHYHU PDQ\ RI WKHP QRZVSHDNWKH &KLQHVHODQJXDJHLH0DQGDULQ +LVWRU\ $FFRUGLQJWRKLVWRULFDOUHFRUGVWKHWHUP´/Lµ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·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·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´RXWVLGHUVµZKRKDGQREORRG WLHVZLWKWKHRULJLQDOPHPEHUIDPLOLHV :DQJ HWDO (DFKFRPPXQHKDGDKHDGPDQZKRZDV LQ FKDUJH RI SURGXFWLRQ DQG GLVWULEXWLRQ DQG RIILFLDWHG DW UHOLJLRXV FHUHPRQLHV ZLWK KLV ZLIH·V DVVLVWDQFH7KHKHDGPDQZDVDOVRDVRFLDOOHDGHUZKRPHGLDWHGGLVSXWHVDQGZDVHPSRZHUHGWR DGPLW´RXWVLGHUVµDVFRPPXQDOPHPEHUV:KLOHIDUPFDWWOHUHPDLQHGSXEOLFSURSHUW\IDUPWRROV KXQWLQJDQGILVKLQJJHDUDQGZRUNWRROVZHUHSULYDWHO\RZQHGE\IDPLOLHV $VRFLDOXQLWFDOOHG´NRPµ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´WKH5HJXODWLRQVRI7RXULVW0DQDJ HPHQWRI+DLQDQ3URYLQFHµDQG ´5XOHRI7RXULVW0DQDJHPHQWRI+DLQDQ3URYLQFHµ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´WKH &KLQHVH +DZDLLµ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·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·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´UHDO QDWLYHVDWZRUNLQWKHLURZQJUDVVKXWVµ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´WRXULVWV ORRN DW V\PEROLF DWWUDFWLRQV LQ GLVWLQFWLYH VW\OHV FRPPXQLFDWHDQGFRQVXPHSDUWLFXODUQDUUDWLYHLQWHUSUHWDWLRQVDQGPRYHWKURXJKWRXULVPVSDFHVLQ VSHFLILDEOHZD\Vµ (GHQVRUS :KLOHLWLVWKHPRUHFRORXUIXODWWULEXWHVRIFXOWXUHZKLFK DUH RIWHQ SRUWUD\HG DV FXOWXUDO VSHFWDFOHV WKH SHUIRUPDQFHV LQVLGH WKH YLOODJHV DUH VHHQ DV ´GLVFLSOLQHGULWXDOVµZKLFKDUHUHSHWLWLYHVSHFLILDEOHLQ PRYHPHQWDQGKLJKO\FRQVWUDLQHGE\WLPH (GHQVRU 7KHSUHVHQWDWLRQVDWIRONYLOODJHVERWK´FUHDWHDQGFRQWURODFXOWXUDODVZHOODVD 61 SK\VLFDO HQYLURQPHQWµ )UHLWDJ S 7KHVH ´WKHPHG PLOLHXVµ SURYLGH D SOHDVXUDEOH HQYLURQPHQWIRUWRXULVWV·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·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´WKHPH SDUN IHYHUµ LQ WKH V %DR :LWKLQ WKUHH \HDUV IROORZLQJ WKH RSHQLQJ RI 6SOHQGLG &KLQD DW OHDVW VL[WHHQ ODUJH WKHPH 62 SDUNVZHUHGHYHORSHGWKURXJKRXW&KLQDDVZHOODVKXQGUHGVRIVPDOO VFDOHSDUNV %DR 7KH PDMRULW\ RI WKHVH ZHUH EDVHG RQ WKHPHV RI &KLQHVH KLVWRU\ DQG HWKQLF PLQRULW\ FXOWXUHV )RU H[DPSOH E\ WKHUH ZHUH DW OHDVW SDUNV EDVHG RQ &KLQHVH IRON OHJHQGV RI ZKLFK ZHUH GHYRWHGWRWKHFODVVLFDOWDOH -RXUQH\WRWKH:HVWSDUNVEDVHGRQHWKQLFIRONFXOWXUHDQGEDVHGRQ KLVWRULFDOUHFUHDWLRQV %DR 3HUKDSV WKH PRVW SURIRXQG DVSHFW RIWKLVH[SHULHQFHKDVEHHQDSRSXODUIDVFLQDWLRQZLWK HWKQLF PLQRULW\ FXOWXUH DV DQ H[RWLF DQG SULPLWLYH VRXUFH RI YLWDOLW\ IRU PRGHUQ &KLQD DV LW IDFHV JOREDOFDSLWDOLVPDQGPDVVLYHFKDQJHV7RXULVPKDVEHHQFUXFLDOLQGLUHFWLQJ&KLQD·VJD]HWRZDUG PLQRULW\ FXOWXUH DQG LQ VWDQGDUGLVLQJ WKDW FXOWXUH LQWR D VHW RI ´DXWKHQWLFµ PDUNHUV HDVLO\ UHFRJQLVDEOHIRUSXEOLFFRQVXPSWLRQ7KHELJJH VWWRXULVWIRONYLOODJHLQ&KLQDVRIDULVWKH&KLQD )RON&XOWXUH9LOODJHVZKLFKRSHQHGRQ2FWREHU7KHSK\VLFDOVL]HRIWKHYLOODJHVLV VTXDUHPHWHUVDQGLWLVVLWXDWHGQH[WWR6SOHQGLG&KLQD)HDWXULQJ´DXWKHQWLFUHSOLFDVµRI´W\SLFDOµ GZHOOLQJVIRURI&KLQD·VRIILFLDOO\UHFRJQLVHGHWKQLFJURXSVWKHSDUNVHHNVLQWUXHR[\PRURQLF WRXULVWIDVKLRQWR´DXWKHQWLFDOO\UHSUHVHQWµ&KLQHVHHWKQLFPLQRULWLHV&KLQD)RON&XOWXUH9LOODJHV WUDIILFVLQWKHVHOHFWLYHFXOWXUDOHVVHQFHRIHDFK SDUWLFXODUHWKQLFJURXS´ZHHGLQJRXWµ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´ )DQ0DRµZDVDQDFWXDO/LPLQRULW\UHVLGHQWLDOFRPPXQLW\7RXULVWV VSHQW DQ KRXU RU VR WRXULQJ WKH YLOODJH DQG H[SHULHQFLQJ WKH ´EDFN VWDJHµ OLIH RI WKH /L PLQRULW\ SHRSOH$SULPLWLYH WKDWFKHGKXWZDVEXLOWIRUHWKQLFGDQFHSHUIRUPDQFHV,WLVZRUWKQRWLQJWKDW WKH RULJLQDO LGHD IRU WKH IRON YLOODJH ZDV QRW FRPPHUFLDOO\ RULHQWHG 5DWKHU LW ZDV GHVLJQHG WR VKRZFDVHWKHHWKQLFFXOWXUHDQGOLIHWRVDWLVI\WRXULVWV·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´)LHOGUHVHDUFKLVDVRFLDOUHVHDUFKPHWKRGWKDWLQYROYHV WKH GLUHFW REVHUYDWLRQ RI VRFLDO SKHQRPHQD LQ WKHLU QDWXUDO VHWWLQJVµ 0DQ\ RI WKH WHFKQLTXHV DVVRFLDWHGZLWKILHOGUHVHDUFKKDYHEHHQGHVLJQHGDQGK DYHGHYHORSHGODUJHO\WKURXJKWKHZRUNRI DQWKURSRORJLVWV +DOISHQQ\ 6LOYHUPDQ $ ILHOG UHVHDUFKHU XVHV YDULRXV PHWKRGV WR REWDLQLQIRUPDWLRQ$V6FKDW]PDQDQG6WUDXVV S ZURWH´)LHOGPHWKRGLVPRUHOLNHDQ XPEUHOODRIDFWLYLW\ EHQHDWKZKLFKDQ\WHFKQLTXHPD\EHXVHGIRUJDLQLQJWKHGHVLUHGNQRZOHGJH DQGIRUSURFHVVHVRIWKLQNLQJDERXWWKLVLQIRUPDWLRQµ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´WHFKQLTXHµ ZKLFK FDQ EH HPSOR\HG LQ LVRODWLRQ IURP RWKHU UHVHDUFK SURFHGXUHV 5DWKHU LW RXJKW WR EH SDUW RI D FRPPRQ FRUH RI DSSURSULDWHUHVHDUFKPHWKRGV 2EVHUYDWLRQVGXULQJWKLVILHOGZRUNRFFXUUHGLQDYDULHW\RIVHWWLQJV)LUVWDOOIRONYLOODJHVLQ +DLQDQZHUHYLVLWHGSKRWRJUDSKHGDQGLQYHQWRULHVRIWKHLU WRXULVPRIIHULQJVZHUHPDGH DWRWDORI YLOODJHVRIZKLFKZHUHFORVHG 6HFRQGVRPHRIWKHPRVWLQIRUPDWLYHREVHUYDWLRQVZHUHPDGH 68 RIWRXULVWVDQGHPSOR\HHV·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´SULPLWLYHVµ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´,QRXUFRQWHPSRUDU\DQGSHUKDSVSRVWPRGHUQDJHWKHUHKDVEHHQDFHQWULIXJDO SXOORILQWHUHVWDZD\IURPFHQ WUHGFXOWXUHVWRZDUGVSUHYLRXVO\PDUJLQDOSHRSOHVµ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´7RXULVPQHFHVVDULO\RSHUDWHVZLWKLQWKLVFRQIOLFWL YHDUHQDµ *UHHQZRRG S 7KLVFKDSWHUSUHVHQWVLQIRUPDWLRQRQRQHRIIRXULGHQWLILHGVWDNHKROGHUV ²JRYHUQPHQWDQG WKHUROHZKLFKJRYHUQPHQWVSOD\LQDXWKHQWLFDWLQJHWKQLFFXOWXUDOUHVRXUFHV,QRUGHUWRXQGHUVWDQG WKH SURFHVV DQG GHJUHH RI DX WKHQWLILFDWLRQ DQDO\VHV DUH XQGHUWDNHQ IURP WKUHH SHUVSHFWLYHV QDWLRQDO SURYLQFLDO DQG UHJLRQDO 1DWLRQDO SHUVSHFWLYHV ZHUH GHULYHG SULPDULO\ IURP SXEOLVKHGGRFXPHQWV7KHJRYHUQPHQWDOGRFXPHQWVDQGVWDWLVWLFVZHUHFROOHFWHGGXULQJWKHIL HOG UHVHDUFKLQWKHVXPPHURI$QXPEHURIRIILFLDOVZHUHLQWHUYLHZHGLQFOXGLQJWKH3URYLQFLDO 7RXULVP %XUHDX 0XQLFLSDO DQG 7RZQVKLS RIILFLDOV 7KH LQWHUYLHZV SURYLGHG DQ LQ GHSWK XQGHUVWDQGLQJRIHWKQLFWRXULVPIURPDJRYHUQPHQWDOSHUVSHFWLYH 7RXULVP'HYHORSPHQWLQ&KLQD :LWKDSRSXODWLRQRIELOOLRQFRQVLVWLQJRIQDWLRQDOLWLHVDUHFRUGHGKLVWRU\RIRYHU\HDUV DQG D WHUULWRU\ RI PLOOLRQ VTXDUH NLORPHWUHV &KLQD LV ZHOO HQGRZHG ZLWK FXOWXUDO DQG QDWXUDO WRXULVP UHVRXUFHV -HQNLQV DQG /LX +RZHYHU WRXULVP LQ &KLQD LV VWLOO D UHODWLYHO\ QHZ 74 SKHQRPHQRQ DV LW GLG QRW DVVXPH DQ\ SULRULW\ LQ WKH JRYHUQPHQW·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´FDSLWDOLVW SROOXWLRQµ DQG ZDV GLVFRXUDJHGE\WKHFHQWUDOJRYHUQPHQW ²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´DSDUWRIIRUHLJQDIID LUVµDVWKHJRYHUQPHQW·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·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·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¶SURJUDP7RXULVPLQFRPHZDV SHUFHQWRI&KLQD·VJURVVGRPHVWLF SURGXFWWKDW\HDU%\WKHWRXULVPLQGXVWU\HDUQHG86 ELOOLRQLQIRUHLJQH[FKDQJHRUWHQWLPHVWKHILJXUHIRU 1RQFRPPHUFLDOL]DWLRQYHUVXV&RPPRGLILFDWLRQ 1DWLRQDO/HYHO 7RXULVP SOD\V D UROH LQ WUDQVIRUPLQJ FROOHFWLYH DQG LQG LYLGXDO YDOXHV LQWR FRPPRGLILHG SURGXFWV &RKHQ ZKLFKLPSOLHVWKDWSHUVRQDO¶FXOWXUDOGLVSOD\V·RIOLYLQJWUDGLWLRQVRUD¶FXOWXUDOWH[W·RI OLYHG DXWKHQWLFLW\ KDV EHFRPH D ¶FXOWXUDO SURGXFW· WKDW PHHWV WKH QHHGV RI FRPPHUFLDO WRXULVP $FFRUGLQJWR'DZVRQ S HWKQLFFXOWXUHVDUHWREH´VROGµXVLQJ´SURIHVVLRQDOEXVLQHVV SUDFWLFHVµ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·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·V JD]H WRZDUG PLQRULW\ FXOWXUH DQG LQ VWDQGDUGL]LQJ WKDW FXOWXUH LQWR D VHW RI PDUNHUV HDVLO\ UHFRJQL]DEOHIRUSXEOLFFRQV XPSWLRQ,Q&KLQDIRONYLOODJHVWUDIILFLQWKHVHOHFWHGFXOWXUDOHVVHQFH 78 RI D SDUWLFXODU HWKQLF JURXS ´ZHHGLQJ RXWµ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·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´JHW UL FK E\ FXOWXUHµ 3HUVRQDO FRPPXQLFDWLRQ D 7KH HWKQLF WRXULVPGHYHORSPHQWLVH[SHFWHGWRDOOHYLDWHWKHILQDQFLDOEXUGHQRIWKHVWDWHDQGHYHQWXDOO\UHGXFH KLJKXQHPSOR\PHQWUDWHVLQHWKQLFFRPPXQLWLHV,QWKHVHFRQGSURFHVVWKHVWDWHSROLFLHVLQWHU SUHW DXWKHQWLFHWKQLFWUDGLWLRQDV´DGRPLQDQWFXOWXUH·VH[SHFWDWLRQVRIDVXERUGLQDWHJURXS·VWUDGLWLRQVµ 2DNHVS 7KHWHUP´HWKQLFLW\µLVGHILQHGEDVHGXSRQFXOWXUDOGLVWDQFHIURPWKH+DQ &KLQHVH 2DNHV 7KHUHIRUH FRPPRGLILFDWLRQ R EVFXUHV WKH JDS EHWZHHQ OLYLQJ HWKQLF WUDGLWLRQVDQGWKHRIILFLDOYHUVLRQVRIWKRVHWUDGLWLRQV(WKQLFPLQRULWLHVDUHDVVRFLDWHGZLWKYHU\ VSHFLILFDQGGHOLPLWHGFXOWXUDOPDUNHUVWKDWDUHVWDQGDUGL]HGDQGFLUFXODWHGLQ&KLQD·VEXUJHRQLQJ LQGXVWU\RIFXOWXUDOFRPPRGLW\SURGXFWLRQ7KHSURGXFWLRQLQFOXGHVHWKQLFWKHPHSDUNVDQGWRXULVW IRONYLOODJHVWKDWSRUWUD\´VWDQGDUGL]HGHWKQLFPDUNHUVµ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·VPRGHUQFLWLHV$FRPELQDWLRQRIVWDWHDJHQFLHVWKH 1DWLRQDOLWLHV $IIDLUV &RPPLVVLRQ PLQZHL DQG WKH &XOWXUDO 5HOLFV 'LYLVLRQ RI WKH 6WDWH &XOWXUDO %XUHDX ZHQZXFKX 2DNHV GHWHUPLQHVZKLFKHWKQLFDUWHIDFWVDUH DXWKHQWLFDQGZKDWLVWREH SUHVHUYHG:KHUHDVWKH PLQZHLLVFRQFHUQHGZLWKDOODVSHFWVRIQDWLRQDOLW\DIIDLUVDQGLVWKHPDMRU VRXUFHRIIXQGLQJLQWKHSURPRWLRQRIHWKQLFWRXULVPWKH ZHQZXFKXLVPRUHVSHFLILFDOO\UHVSRQVLEOH IRUVHOHFWLQJDQGSUHVHUYL QJFXOWXUDODUWHIDFWV7KHVWDWH·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´+DLQDQHVHµLVYDJXH+DLQDQLVRQHRIWKHIHZDUHDVRI&KLQDZKHUHWKHUHKDYHEHHQ DQGUHPDLQHQWUHQFKHGVRFLDODVZHOODVSROLWLFDOFRQIOLFWVEHWZHHQORFDODQGQDWLRQDOLQWHUHVWV )HQJ DQG*RRGPDQ ,Q SDUWWKLVDVSHFWRI+DLQDQ·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²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´EDFNZDUGµ´XQHGXFDWHGµDQG´EDUEDULDQµZHUH KHDUGHYHU\WLPH,FRQGXFWHGLQWHUYLHZVZLWK+DLQDQRIILFLDOV7KHFXUUHQWSURYLQFLDOJRYHUQPHQWLV FRQWUROOHGE\PDLQODQGHUVZKRWHQGWRGHQ\WKHH[LVWHQFHRID+DLQDQHVHFXOWXUHGLIIHUH QWIURPWKDW RIWKHPDLQODQGDUJXLQJWKDWWKH/LKDYHEHHQDVVLPLODWHGWR+DQFXOWXUH +DLQDQKDVEHHQLGHQWLILHGDVRQHRIWKHVHYHQPDMRUQDWLRQDOWRXULVPGLVWULFWVDQGWKHRQO\ QDWLRQDOO\ GHVLJQDWHG ZLQWHU UHVRUW LQ &KLQD 6LQFH WKH PLG V WRXULVW DWWUDFWLRQV LQ 81 GLIIHUHQW FDWHJRULHV KDYH EHHQ LGHQWLILHG DQG GHYHORSHG RQ WKH LVODQG LQFOXGLQJ QDWLRQDOO\ ZHOO NQRZQ ODQGVFDSHV RI ´WRXULVP GHYHORSPHQW ]RQHVµ DQG ´WRXULVW VSRW Vµ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·W KDYHH[DFWGDWDRQWKHQXPEHURIWRXULVWIRONYLOODJHVLQ+DLQDQ,EHOLHYHWKDWORFDOJRYHUQPHQWWHQGVWR VXSSRUW VXFK GHYHORSPHQW 7KH\ QHHG PRQH\ WR PDNH FKDQJH DQG WRXULVP LV D ZHOFRPH VWUDWHJ\ IRU WKH FRPPXQLW\ +RZHYHUWKHDXWKHQWLFLW\RIHWKQLFFXOWXUHVZDVQRWGHWHUPLQHGE\WKHHWKQLFFRPPXQLW\EXWE\ WKH SURYLQFLDO JRYHUQPHQW SDUWLFXODUO\ WKH +DLQDQ (WKQLFLW\ DQG 5HOLJLRQ %XUHDX +(5% D UHJLRQDO EUDQFK RI WKH 1DWLRQDOLWLHV $IIDLUV &RPPLVVLRQ PLQZHL 7KH+(5%FRQWUROVDQG PRQLWRUV DQ\ HYHQW UHODWHG WR HWKQLFLW\ DQG UHOLJLRQ ,I WKH VHOHFWHG WRXULVW YLOODJHV DUH JUDQWHG ´SUHVHUYHGFXOWXUDOUHOLFVµVWDWXVXQGHUWKH+(5%WKLVLPSOLHVWKDWWKHYLOODJHV DUH´PXFKOHVVVSRLOHG DQGPRUHWUDGLWLRQDOµ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²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·HFRQRPLFZRUWK%XWWKH\ODFNVWUDWHJL HVWR 83 WXUQ WKHVH DXWKHQWLF FXOWXUDO DVVHWV LQWR WDQJLEOH ILQDQFLDO UHVRXUFHV ,Q RWKHU ZRUGV HWKQLF FRPPXQLWLHVDUHHDJHUWRFRPPRGLI\WKHLUFXOWXUHVDQGWRUHDFKZKDWWKH\WKLQNRIDVPRGHUQLW\ 2DNHV S FDOOHGWKLVNLQGRISXUVXLWD´PLVSOD FHGVHDUFKIRUPRGHUQLW\µ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´ ]KHQGHµ DXWKHQWLFLW\ DQG´MLDGHµ LQDXWKHQWLFLW\ OLHLQGLVWDQFHIURPWKHFRUHRIWKHHWKQLFFRPPXQLW\+RZHYHUWKH\LJQRUHGWKDWGHOLYHU\RID WRXULVP SURGXFW LQFOXGHV D VHW RI VHUYLFHV DQG QRW VLPSO\ WKH ORFDWLRQ 2WKHU IDFWRUV VXFK DV PDUNHWLQJDQGPDQDJHPHQWH[HUWJUHDWLQIOXHQFHR QWKHVXFFHVVRIHWKQLFWRXULVP,IWKHORFDOVWDWH FKDQJHVWKHFXUUHQW ODLVVH]IDLUHSROLF\DQGSOD\VDQDFWLYHUROHLQDXWKHQWLFDWLQJHWKQLFFXOWXUHWKHQ WRXULVW IRON YLOODJHV ZRXOG QRW EHFRPH PRUHWUDGLWLRQDOEXWUDWKHUJRRGDWSOD\LQJWUDGLWLRQ, Q IDFWWKHORFDOVWDWHLVWU\LQJWRILQGDEDODQFHEHWZHHQSRZHUSROLF\DQGSODFH &XOWXUDO(YROXWLRQYHUVXV0XVHXPLILFDWLRQ 1DWLRQDO/HYHO &KDQJH LV DQ LQHYLWDEOH SDUW RI VRFLDO SURFHVVHV 7KH SROLWLFDO LPSOLFDWLRQV RI FXOWXUDO FKDQJH EURXJKW DERXW E\ WRXULVP DUH SUREOHPDWLF WKH\ LQYROYH WKH YDOXHV RI ERWK WKH YLHZHU DQG WKH YLHZHG0DF&DQQHOO S FRPPHQWHGWKDW´WRXULVWLILHGHWKQLFJURXSVDUHRIWHQZHDNHQHG E\DKLVWRU\RIH[SORLWDWLRQOLPLWHGLQUHVRXUFHVDQGSRZHUµ+RZHYHU ´WKHREMHFWLILFDWLRQRIORFDO FXOWXUH YLD WRXULVP GRHV QRW DOZD\V GHVWUR\ LW RQ RFFDVLRQ LW WUDQVIRUPV DQG HYHQ VWLPXODWHV LWV 84 IXUWKHUSUROLIHUDWLRQµ *UHHQZRRGS &XOWXUDOGLYHUVLW\FDQEHERWKDERRQDQGDEDQH IRUWKHVWDWH0RUHRIWHQWKDQQRWJRYHUQPHQWRIILFLDOVSHUFHLYHHWKQLFGLIIHUHQWLDWLRQDVDFRQVWDQW VRXUFHRISUREOHPV(WKQLFJURXSVQRWRQO\FRPSHWHIRUVFDUFHUHVRXUFHVEXWDOVRPDNHFODLPVDQG GHPDQGVRQVWDWHDFWRUV0RUHRYHUHWKQLFOR\DOWLHVWKUHDWHQWRXQGHUPLQHWKHQDW LRQDOLVWSURMHFWRI FXOWXUDOXQLW\ZLWKLQDJLYHQWHUULWRU\ 7KH SROLFLHV IRU VWDWH JRYHUQPHQW WRZDUG FXOWXUDO SUHVHUYDWLRQ VHHN WR ´IRVVLOL]Hµ FHUWDLQ DVSHFWVRIFXOWXUDOWUDGLWLRQ 2DNHV GUDZLQJGLVWLQFWERXQGDULHVDURXQGORFDOFXVWRPVIL[LQJ WKHPLQWLPHDQGVSDFHDQGHQVXULQJWKDWWKH\UHPDLQHQFDVHGDVH[KLELWVIRUWKHPRGHUQZRUOGWR REVHUYHDQGDSSUHFLDWH3UHVHUYDWLRQSOD\VDVLJQLILFDQWUROHLQVKDSLQJDORFDOGLVFRXUVHRISODFH LGHQWLW\DQGHWKQLFPDUNHUV7RXULVPDWWKHVDPHWLPHSO D\VDQLPSRUWDQWVRFLDODQGFXOWXUDOUROH WKDW FDQQRW EH GLVPLVVHG DV SXUHO\ QHJDWLYH ,Q &KLQD ZKHUH WKH FHQWUDO VWDWH UHPDLQV RYHUO\ VHQVLWLYH WR WKH YHVWLJHV RI ´ORFDO QDWLRQDOLVPµ RU WR DQ\ FKDOOHQJHV WR FXOWXUDO HYROXWLRQ LQ WKH GLUHFWLRQ RI +DQ WRXULVP SURYLGHV ORFDO PLQRULW\ JURXSV ZLWK D IRUXP IRU PDNLQJ FODLPV DERXW WKHPVHOYHVDQGWKHLUFRPPXQLWLHV 7KHFXUUHQWVWDWHSROLFLHVHQFRXUDJHHWKQLFFRPPXQLWLHVWREHFRPHPRUH´GHYHORSHGµDQG ´PRGHUQL]HGµ(WKQLFFXOWXUDOHYROXWLRQLVVHHQDVDVWHSWR ZDUGV´+DQLILFDWLRQµ%HFDXVHWKHPDVV DFFXOWXUDWLRQ SURFHVV ZRXOG GLPLQLVK WKH WRXULVWV· LQWHUHVW WR YLVLW GLIIHUHQW ´FXOWXUHVµ WKH VWDWH SROLFLHVFDXWLRXVO\XVHWKHWHUP´FRQVWUXFWLYHGHYHORSPHQWµ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´XQLTXHQHVVµ DQG ´GLVWLQFWLYHQHVVµ7KLVLQWXUQOHDGVWRWKHFUHDWLRQRIIRONYLOODJHVDV´RSHQ DLUPXVHXPVµ 3URYLQFLDO/HYHO 3URYLQFLDOSROLFLHVLQ+DLQDQDUHVWUXJJOLQJZLWKWKHUHODWLRQVKLSVDPRQJWRXULVPGHYHORSPHQWDQG SODFHLGHQWLW\+DLQDQKDVORQJEHHQSHUFHLYHGZLWKLQ&KLQDDVD´EDUEDULDQUHPRWHLVODQGµDQGD VRFDOOHG´FXOWXUDOGHVHUWµ7RXULVPEULQJVORFDOVDQRSSRUWXQLW\WRLGHQWLI\WKHLUFXOWXUDOPDUNHUV 7KLVSURFHVVLVWKHRQJRLQJUHGHILQLWLRQRISODFHLQQHZ WHUPV²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´REMHFWLYHµ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´EHLQJDELW OLNH D ]RR IHHOLQJ RQ GLVSOD\ IRU WRXULVWV WR FRPH DQG VHH ZKDW D /L SHUVRQ ORRNV OLNH LQ P\ HQYLURQPHQWµ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´ZKREHQHILWV"µVKRXOGEHIXQGDP HQWDOWR WKHDVVHVVPHQWRIGHYHORSPHQWSROLFLHV +DOO 7KHUHVHDUFKRQ&KLQHVHPLQRULWLHV 7RRSV VXJJHVWVWKDWHWKQLFPLQRULWLHVKDYHQRWUHFHLYHGPXFKGLUHFWHFRQRPLFEHQHILWIURPWRXULVP GHYHORSPHQW2WKHUUHVHDUFKLQ GRPLQDWHGE\FHQWUDOJRYHUQPHQWDQGWKDWHWKQLFPLQRULWLHVZRUNHGPDLQO\LQORZ OHYHORSHUDWLRQDO SRVLWLRQV &XOWXUDO SUHVHUYDWLRQ ZDV QRW VHHQ DV FULWLFDO ZKHQ WKH PDQDJHULDO SRVLWLRQV ZHUH RFFXSLHGE\WKH+DQHWKQLFPDMRULW\ 7KH GRFXPHQWV IURP WKH FHQWUDO JRYHUQPHQW GLG QRW JLYH JXLGHOLQHV UHJDUGLQJ D EDODQFH EHWZHHQHFRQRPLFGHYHORSPHQWDQGFXOWXUDOSUHVHUYDWLRQ6LQFHWKHHDUO\VKXQGUHGVRI´IRON FXOWXUDOIHVWLYDOVµRUJDQL]HGE\JRYHUQPHQWVKDYHEHHQ HVWDEOLVKHGLQ&KLQD+RZHYHUWKHSULPH PRWLYDWLRQVZHUHWRDWWUDFWFDSLWDO =KX 7KHUROHRIHWKQLFWRXULVPLQ&KLQDLVGHVFULEHGDV DQ´HQWLFHPHQWµZKLFKLVEDLWIRUH[WHUQDOLQYHVWPHQWLQORFDOHFRQRPLFGHYHORSPHQW 2DNHV 89 &XOWXUDO SUHVHUYDWLRQ KDV WHQGHG WR EH D GLOHPPD IRU WKH FHQWUDO JRYHUQPHQW WRXULVP XWLOL]HVWKHFXOWXUDOUHVRXUFHLQH[FKDQJHIRUILQDQFLDOVXFFHVVZKLOVWSUHVHUYDWLRQPHDQVWREHOHIW LQWDFWZLWKRXWGHYHORSPHQW7RXULVPE\DQGODUJHFUHDWHVDQXPEHURIRSSRUWX QLWLHVIRUHFRQRPLF GHYHORSPHQWDQGXOWLPDWHO\FKDQJHVWKHHWKQLFSHRSOH·VVWDQGDUGRIOLYLQJDQGKHQFHWKHLUFXOWXUH 3URYLQFLDO/HYHO 7KH PDMRU ZHDNQHVV RI WKH +DLQDQ HFRQRP\ LV LWV FRQWLQXRXV GHSHQGHQFH RQ WKH PDLQODQG HVSHFLDOO\ IRU FDSLWDO )HQJ 7KH HVWDEOLVKPHQW RI WKH 6(= ZDV DQ DWWHPSW WR FKDQJHWKH FXUUHQW VWDWXV $OWKRXJK WKHUH KDV EHHQ JHQHUDO DJUHHPHQW ZLWKLQ WKH JRYHUQPHQW RQ WKH EURDG IXQGDPHQWDOV RI WKH SURYLQFLDO GHYHORSPHQW VWUDWHJ\ VXFK DV ´VPDOO JRYHUQPHQW ELJ V RFLHW\µ &DGDULRHWDO WKHUHKDVEHHQFRQVLGHUDEOHGLVDJUHHPHQWZLWKLQ+DLQDQDVWRZKLFKVHFWRURI WKHHFRQRP\UHSUHVHQWVWKHSURYLQFH·VFRPSDUDWLYHDGYDQWDJH6LQFHWKHSURYLQFH·VHFRQRPLF GHYHORSPHQW VWUDWHJ\ KDV FKDQJHG GLUHFWLRQ VHYHUDO WLPHV 7KH OHDGLQJ VHFWRU KDV FKDQJHG IURP LQGXVWU\WDUJHWHGDWWKHHVWDEOLVKPHQWRI+DLQDQ3URYLQFHWRDJULFXOWXUHIURPODWHZKHQWKH RULJLQDO H[SHFWDWLRQ RI LQGXVWULDO DQG H[WHUQDO RULHQWHG GHYHORSPHQW GLVDSSHDUHG ZLWK :HVWHUQ UHDFWLRQVWRWKH 7LDQDQPHQ6TXDUHLQFLGHQWRIWKDW-XQHWRWRXULVPLQGXULQJ+DLQDQ·VILUVW SURSHUW\ ERRP WR LQGXVWU\ DJDLQ EXW ZLWK GLIIHUHQW HPSKDVHV DV DQQRXQFHG E\ WKH 6HFRQG 3URYLQFLDO &RQJUHVV RI WKH &KLQD &RPPXQLVW 3DUW\ LQ -XO\ +RZHYHU LGHQWLILFDWL RQ RI DJULFXOWXUH WRXULVP RU LQGXVWU\ DV +DLQDQ·V OHDGLQJ VHFWRU LV QHLWKHU D PHUH TXHVWLRQ RI XQGHUVWDQGLQJ QRU D VLPSOH HFRQRPLF GHFLVLRQ EXW LV SROLWLFDOO\ FKDUJHG QRW OHDVW VLQFH WKH SURYLQFH·VFRPPXQLWLHVKDYHWKHLUEDVHVLQGLIIHUHQWVHFWRUVRIWK HHFRQRP\ 7KHDGYRFDF\RIWRXULVPDVDSRWHQWLDOOHDGVHFWRUIRUWKHHFRQRP\LVHDVLO\XQGHUVWRRG$V LQWKHSURPRWLRQRIWKHGHYHORSPHQWRIDJULFXOWXUH+DLQDQ·VWURSLFDOORFDWLRQLVDPDMRUDGYDQWDJH ,WKDVEHDXWLIXOVFHQHU\DSOHDVDQWFOLPDWHDQGS ULYLOHJHGJHRJUDSKLFDOSRVLWLRQDQGDQH[FHSWLRQDOO\ 90 ORZOHYHORILQGXVWULDOGHYHORSPHQW6LQFHLWKDVEHHQDIRFXVRIGRPHVWLFWRXULVPIURPWKH PDLQODQG +DLQDQ LV VHHQ DV DQ H[RWLF DWWUDFWLRQ RIIHULQJ D YHU\ GLIIHUHQW OLIHVW\OH IURP WKH PDLQODQG 7KH SURYLQFLDO JRYHUQPHQW DUJXHG WKDW PRQH\ EURXJKW LQ E\ WKH WRXULVWV LV WKH EHVW FKDQFH IRU RULJLQDO DFFXPXODWLRQ JLYHQ WKDW PXFK RI +DLQDQ·V DJULFXOWXUH DQG LQGXVWU\ DUH ERWK UHODWLYHO\ EDFNZDUG WKDW WKH GHYHORSPHQW RI WRXULVP ZLOO EH D VWURQJ VWL PXOXV WR LPSURYH WKH LQIUDVWUXFWXUH RI +DLQDQ SDUWLFXODUO\ WUDQVSRUW FRPPXQLFDWLRQV DQG RWKHU SDUWV RI WKH VHUYLFH VHFWRUDQGWKDWWRXULVPZLOOFUHDWHDPDUNHWIRUORFDOSURGXFHDQGRSSRUWXQLWLHVIRUHPSOR\PHQWLQ WKRVHODERXULQWHQVLYHVHFWRUVUHODWHG WRWRXULVP 7KRVH DGYRFDWLQJ WKH GHYHORSPHQW RI +DLQDQ·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·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´RQWKHPDSµ7KHSUHYDOHQWWKLQNLQJLQ+DLQDQLVWKDWZLWKRXWWRXULVPHWKQLFFXOWXU HVZRXOGKDYH DOUHDG\GLVDSSHDUHGRUKDYHEHHQDVVLPLODWHG 5HJLRQDO/HYHO 0DQ\ RI +DLQDQ·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´0DQ\ \RXQJ /L JHQHUDWLRQ FDQQRW HYHQ VSHDN WKH /L ODQJXDJHQRZLWLVWLPHIRUWKHPWRZRUNLQWKH>IRON@YLOODJHVµ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´ORFDOQDWLRQDOLVPµ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·V 5HSXEOLF &RQQHU 3ROLFLHV FRQFHUQLQJ PLQRULW \ QDWLRQDOLWLHVZHUHSULPDULO\JRYHUQHGE\DGHVLUHWRHVWDEOLVK&KLQHVHQDWLRQDOXQLW\DQGWKHXOWLPDWH JRDO RI VRFLDOLVP&RQWUROLVDQLPSRUWDQWLVVXHLQWKHSUHVHQWDWLRQRIHWKQLFFXOWXUH+RZHYHU HWKQLF SHRSOHV ZKR VHHN WR DVVHUW WKHLU ULJKWV SDUW LFXODUO\ RYHU ODQG DUH W\SLFDOO\ VWHUHRW\SHG DV ´WURXEOHPDNHUVµ7KXVWKHVWDWHSOD\VDGRXEOHUROHLQDXWKHQWLFDWLQJWKHHWKQLFFXOWXUDOUHVRXUFHV 2Q WKH RQH KDQG LW VXSSRUWV WKH FXOWXUDO GLVWLQFWLYHQHVV IRU HFRQRPLF GHYHORSPHQW SDUWLFXODUO\ WRXULVPGHYHORSPHQW2QWKHRWKHUKDQGLWVXSSUHVVHVDQ\´WUXHµDXWRQRPRXVULJKWV([DPSOHV FDQEHVHHQLQWKHWLJKWFRQWURORI7LEHWDQG;LQJMLDQJDQGWKHURXQGXSRIGLVVGHQWVZKRVXSSRUW LQGHSHQGHQFH 3URYLQFLDO/HYHO +DLQDQ LV DQ H[FHSWLRQ LQ &KLQD D GLVWDQW JHRJUDSKLFDO ORFDWLRQ IURP %HLMLQJ SURYLGHV UHODWLYH IUHHGRPRISROLWLFDOH[SUHVVLRQ)ROORZLQJWKHEOXHSULQWRIWKH+DLQDQ6(=WKHQHZSURYLQFHZDV H[SHFWHGWREXLOGDQHZDQGGLVWLQFWSROLWLFDODQGHFRQRPLFV\VWHPEDVHGXSRQQHZSULQFLSOHV VXFK DVWKH´VRFLDOLVWPDUNHWHFRQRP\µDQG´VPDOOJRYHUQPHQWODUJHVRFLHW\µ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´WHVWWKHZDWHUVµRIDQ\EXVLQHVVLQQRYDWLRQ 94 +DLQDQ·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·V 5HSXEOLF RI &KLQD *HQHUDO )HQJ KRSHG WKDW D +DLQDQ 3URYLQFH VHSDUDWH IURP *XDQJGRQJ ZRXOG EH HVWDEOLVKHG SHUPLWWLQJ JUHDWHUDXWRQRP\+RZHYHUWKHFHQWUDOJRYHUQPHQWUHJDUGHGWKHSURSRVDODVDQRYHUO\UDGLFDOLGHD 7KLV LQ WXUQ OHG WR WKH UHSUHVVLRQ RI )HQJ·V VR FDOOHG ´LQGHSHQGHQW NLQJGRPµ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´7KH DGPLQLVWUDWLRQ RI WRXULVP XQGHU VRFLDOLVP«KDV«LPSOLFLWO\DFWHGERWKWRFRQWDLQDQGWRFRQFHQWUDWHWRXULVP ²DQGHVSHFLDOO\IRUHLJQ WRXULVP²ZLWKLQYHU\VSHFLILFVSDWLDOSDUDPHWHUVµ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´VPDOOHU JRYHUQPHQWµ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´VXVWDLQDELOLW\µIURPDVWDWHSHUVSHFWLYHDSSHDUVWREHYHU\GLIIHUHQWIURPZKDWLVNQRZQLQWKH GHYHORSHGFRXQWULHVZKHUHVRFLDO FXOWXUDODQGHQYLURQPHQWDOLVVXHVKDYHEHHQJLYHQJUHDWHUSULRULW\ ,QUHFHQW\HDUV&KLQDKDVHPSKDVL]HGHFRV\VWHPSUHVHUYDWLRQDQGUHJXODWHG ERWKIDPLO\SODQQLQJ DQGHQYLURQPHQWDOSURWHFWLRQDVEDVLFVWDWHSROLFLHV,WLVZRUNLQJWRZDUGVVXVWDLQDEOHGHYHORSPHQW DQGLVLPSOHPHQWLQJ´$3URSRVDOIRUWKHVW&HQWXU\RI&KLQDµDQG´$%DVLF3URSRVDOIRU(QYLURQPHQWDO 3URWHFWLRQLQ&KLQDµ+RZHYHULQWHUPVRIWRXULVPGHYHORSPHQWWKHSROLFLHVVWLOOODJEHKLQGWKRVHLQ 97 WKH :HVW 6R IDU QR VLQJOH VWDWH OHYHO WRXULVP SROLF\ UHIHUV WR HQYLURQPHQWDO SUHVHUYDWLRQ ´6XVWDLQDEOHWRXULVPµE\DQGODUJHLVDNLQGRI´ZLQGRZ GUHVVLQJµLQWKHPDMRULW\RI JRYHUQPHQWDO UHSRUWV 3URYLQFLDO/HYHO 7KHPRVWVLJQLILFDQWGHYHORSPHQWVWUDWHJ\LQYROYLQJWRXULVPDWWKHSURYLQFLDOOHYHOZDV´ 7KH3URSRVDO IRU 7KH &UHDWLRQ RI $Q (FR3URYLQFH LQ +DLQDQµ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´FRPELQH WURSLFDO LVODQG UHVRXUFHVZLWKWKHHFRORJLFDOHQYLURQPHQW«SURWHFWWKHQDWXUDOHQYLURQPHQWDQGLQWHJUDWHKXPDQ DQGQDWXUDOUHVRXUFHVµ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´VXQVHDVDQGVH[µGHVWLQDWLRQIURPPDLQODQG&KLQD$OWKRXJKPRXQWLQJ HYLGHQFHLQGLFDWHVWKDWWKHHFRORJLFDOHQYLURQPHQW LQ+DLQDQKDVGHWHULRUDWHGDQQXDOO\ )HQJ PDVVWRXULVPLVVWLOOWKHGRPLQDQWWUDYHOSKHQRPHQRQLQ+DLQDQDQGKDUGO\FDQEHFKDQJHGLQWKH VKRUWUXQ 5HJLRQDO/HYHO $W SUHVHQW WKHUH LV OLWWOH HIIHFW RI WKH LPSOHPHQWDWLRQ RIWKHHFR SURYLQFH LQLWLDWLYHIRUWKHORFDO VWDWH0DVVWRXULVPLVVWLOOWKHSRSXODUPRGHIRUORFDOWRXULVPGHYHORSPHQW3ODQQLQJZDVQRQ H[LVWHQWDWWKHORFDOOHYHODQGVXVWDLQDEOHWRXULVPGHYHORSPHQWLVXQGHUVWRRGDV´VXVWDLQDEOHWRXULVW DUULYDOVµ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«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·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´QHJRWLDEOHµ QRW D JLYHQ *RYHUQPHQWV DW GLIIHUHQW OHYHOV SOD\ D FULWLFDOUROHWRDXWKHQWLFDWHHWKQLFFXOWXUHVVR DVWRILWWKHSURFHVVRIWRXULVPGHYHORSPHQW 3HUKDSV WKH PRVW IXQGDPHQWDO SROLWLFDO TXHVWLRQ VXUURXQGLQJ HWKQLF WRXULVP LV WKDW RI FRQWURO (WKQLF FRPPXQLWLHV LQ +DLQDQ KDYH OLWWOH FRQWURO RYHU WRXULVP GHYHORSPHQW 0DQ\ RIILFLDOVZHUHGLVSDWFKHGIURPWK HPDLQODQGDQGWKH\ODFNVXIILFLHQWNQRZOHGJHRIHWKQLFFXOWXUHV (WKQLF PLQRULW\ SDUWLFLSDWLRQ LQ GHFLVLRQ PDNLQJ LV FXUUHQWO\ QRQ H[LVWHQW LQ +DLQDQ $OWKRXJK JRYHUQPHQWV HQFRXUDJH HWKQLF PLQRULWLHV WR JHW LQYROYHG LQ WRXULVP GHYHORSPHQW WKH LVVXHV R I ´ZKR JHWV ZKDW ZKHUH KRZ DQG ZK\ RI WRXULVPµ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´QHHGVµ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·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ost Community Authentification Commodification Indigenous Expectation groups Consumption Competition 7RXULVWV 2WKHU Encounter Acculturation 6RXUFHDGDSWHGIURP5RELQVRQ 3HUKDSV WKH PRVW REYLRXV GLPHQVLRQ LV WKDW ZKLFK H[LVWV EHWZHHQ WRXULVWV DQG KRVWV RIWHQ FKDUDFWHUL]HGDVD´IDFHWRIDFHµHQFRXQWHUDQGDWZRZD\SURFHVVRIFRPPXQLFDWL RQ 6ZLQJOHKXUVW +RZHYHU LQ D VWUXFWXUDOLVW YHLQ WKH LQWHUIDFH EHWZHHQ WKH WRXULVP EXVLQHVV DQG WKH KRVW FRPPXQLW\LVDOVRDUDWKHUREYLRXVVRXUFHRISRWHQWLDOFRQIOLFW7RXULVPEXVLQHVVHVLQIRONYLOODJHV QRW RQO\ KLUH D QXPEHU RI ORFDO HWKQLF HPSOR\HHV WR VHUYH WKH YLVLWRUV EXW DOVR DXWKHQWLFDWH WKH HWKQLFFXOWXUHVWRVXLWYLVLWRUQHHGVDQGZDQWV LHWKH\GHWHUPLQHZKDWKRZDQGZKHQDVSHFWVRI HWKQLFFXOWXUHDUHWREHSRUWUD\HG&RQIOLFWVRFFXUZKHQ´FXOWXUDOFDUU\LQJFDSDFLW\µKDVUHDFK HGWKH ´WLSSLQJSRLQWµ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·VZRUN 7KH6WUXFWXUHRI7RXULVP%XVLQHVVHV 7RXULVP EXVLQHVV LQ +DLQDQ IDOOV LQWR WKUHH PDMRU FDWHJRULHV VWDWH RZQHG EXVLQHVV MRLQW YHQWXUHEXVLQHVVDQG SULYDWHO\ RZQHGEXVLQHVV6WDWHRZQHGEXVLQHVVRFFXSLHVWKHPDMRULW\RI WKHWRXULVPLQGXVWU\LQ+DLQDQLQFOXGLQ JWKHPL[RIDFFRPPRGDWLRQWUDQVSRUWDWWUDFWLRQVVXSSRUW VHUYLFHV DQG WKH RUJDQLVDWLRQV EHKLQG WKHVH WRXU RSHUDWRUV WUDYHO DJHQWV KRWHO GHYHORSHUV DQG JRYHUQPHQWDJHQFLHVDVERWKSURPRWHUVDQGUHJXODWRUV*LYHQWKHSROLWLFDOVWUXFWXUHLQ&KLQDVWD WH RZQHG EXVLQHVV JHQHUDOO\ HQMR\V D QXPEHU RI SULYLOHJHV )RU H[DPSOH WKH VWDWH WUDYHO DJHQWV LQ +DLQDQKDYHVSHFLDODUUDQJHPHQWVZLWKWKHDLUOLQHFRPSDQLHVWKDWSURYLGHEHORZ PDUNHWDLUIDUHVIRU SDFNDJHWRXUV6WDWHRZQHGEXVLQHVVFDQDOVRPRQRSROL]H WKHSULFHVRIKRWHOVWUDQVSRUWDWLRQDQG SDUNHQWUDQFHIHHV -RLQWYHQWXUHEXVLQHVVLQ+DLQDQLVPDLQO\VHHQLQWKHKRWHOLQGXVWU\7KHPDMRULW\RIVWDUUHG KRWHOVLQ+DLQDQDUHMRLQWYHQWXUHGEHWZHHQJRYHUQPHQWDQGH[WHUQDOVRXUFHVRILQYHVWPHQW8QGHU WKH JRYHUQPHQW·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· LQFUHDVHG DZDUHQHVV RI KRZ DXWKHQWLFLW\ GULYHV WKH WRXULVW PDUNHW LQ HWKQLF WRXULVP 2IILFLDO DSSURYDOE\WKH+DLQDQ(WKQLFLW\DQG5HOLJLRQ%XUHDX +(5% LVZLGHO\VHHQDVDQLQGLFDWRURIDXWKHQWLFLW\7KH+(5%FRQWUROVDQGPRQLWRUVHYHQWV UHODWHGWRHWKQLFLW\DQGUHOLJLRQ,IWKHVHOHFWHGWRXULVWYLOODJHVDUHJUDQWHG´ SUHVHUYHGFXOWXUDOUHOLFVµ VWDWXVXQGHUWKH+(5%WKLVLPSOLHVWKDWWKHYLOODJHVDUH´PXFKOHVVVSRLOHGDQGPRUHWUDGLWLRQDOµ 3HUVRQDO &RPPXQLFDWLRQ D 7UDYHO DJHQFLHV LQ +DLQD Q DUH WKXV PRUH OLNHO\ WR WDNH WRXU JURXSV WR WKHVH VDQFWLRQHG YLOODJH 6XFK GHVLJQDWLRQV RIWHQ EHQHILWHG WKH UHPRWH YLOODJHV RQ WKH FHQWUDO URXWH RI +DLQDQ ZKHUH D JUHDWHU GHJUHH RI DXWKHQWLFLW\ KDV EHHQ PDLQWDLQHG 7KH WRXULVW 106 YLOODJHVORFDWHGFORVHWR WKHFLW\KDYHEHHQH[FOXGHGIURPWKH+(5%DSSURYDOVLQFH´WKRVHYLOODJHV QHDU 6DQ\D DQG +DLNRX DUH WRR FRPPHUFLDO WRR FORVH WR WKH FLW\ DQG WKHLU YDOXHV DUH RULHQWHG WRZDUGPRQH\µ 3HUVRQDO&RPPXQLFDWLRQD 7KHLQIOXHQFHRIWKH+(5%GLGQRWZDQH XQWLO WKH FKDQJHV RI WUDIILF URXWHV DW WKH HQG RI 7KLV UHVHDUFK VXJJHVWV WKDW WUDIILF URXWHV WKHQ EHFDPHWKHPDMRUIRUFHLQIOXHQFLQJWKHGLVWULEXWLRQRIIRONYLOODJHVDVZHOODVHWKQLFSUHVHQWDWLRQV )LJXUHSUHVHQWVWKHGLVWULEXWLRQRIIRONYL OODJHVLQ )LJXUH7KH'LVWULEXWLRQRI5HVHDUFKHG)RON9LOODJHVLQ+DLQDQ Haikou City Qiongshan City Wenchang City Lingao County Danzhou City Chengmai County Dingan County Changjiang Li Autonomous County Tunchang County Qionghai City Hainan Village of Chinese National Cultures Indonesian Village Dongfang City Wanning City Tongzha City Tongzha Li Folk Village Tianniu Miao Ethnic Manor Baoting Lingshui Li Tianya Haijiao Areca Manor Autonomous County Theme Park Sanya City Sanya Li Folk Village Sanya Luhuitou Theme Park 107 7KH'LVWULEXWLRQRI)RON9LOODJHVLQ 7DEOH SUHVHQWV WKH ORFDWLRQV DQG FKDUDFWHULVWLFV RI WKH IRON YLOODJHV LQ 7KH PDMRULW\ RI YLOODJHVDUHFRQFHQWUDWHGLQDQGDURXQGWKHFLW\RI6DQ\D7KH,QGRQHVLDQ9LOODJHLVORFDWHGQHDUWKH HDVWHUQKLJKZD\DQG%DRWLQJ$UHFD0DQRULVORFDWHGQHDUWKHFHQWUDOKLJKZD\7KHILHOGUHVHDUFK XQYHLOHGDQLQWHUHVWLQJILQGLQJWKDWFKDQJHVRFFXUUHGLQWKHGLVWULEXWLRQRI IRONYLOODJHVIROORZLQJWKH QHZKLJKZD\FRQVWUXFWLRQ 7DEOH7KH&KDUDFWHULVWLFVRI)RON9LOODJHVLQ+DLQDQ 1DPH 2SHQLQJ /RFDWLRQ 7RXULVW 1XPEHURI 2ZQHUVKLS 'DWH $UULYDOV (PSOR\HHV SHU ZHHN +DLQDQ9LOODJH $SULO +DL\XFHQWUDO 3ULYDWH RIWKH&KLQHVH OLQH7RQJ]KD 1DWLRQDO &XOWXUHV 7RQJ]KD/LIRON )HEUXDU\ +DL\XFHQWUDO 3ULYDWH YLOODJH OLQH7RQJ]KD %DRWLQJ$UHFD 2FWREHU *DQ]KDOLQJ 3ULYDWHDQG 0DQRU %DRWLQJ/L JRYHUQPHQW DQG0LDR $XWRQRPRXV 5HJLRQ 7LDQQLX0LDR -DQXDU\ 7LDQGX 3ULYDWHDQG (WKQLF0DQRU WRZQVKLS JRYHUQPHQW QHDUWKHFLW\ RI6DQ\D 6DQ\D/L(WKQLF 0D\ 7LDQGX 3ULYDWH )RON9LOODJH WRZQVKLS QHDUWKHH[LW RIHDVWHUQ H[SUHVVZD\ 6DQ\D/XKXLWRX -XO\ 6DQ\D 3ULYDWHDQG 7KHPH3DUN *RYHUQPHQW 7LDQ\D+DLMLDR 6HSWHPE 6DQ\D 3ULYDWHDQG 7KHPH3DUN HU JRYHUQPHQW ,QGRQHVLDQ )HEUXDU\ ;LQJORQJ )RUHLJQ 9LOODJH :DQQLQJ LQYHVWPHQW FRXQW\ 7RXULVWIRONYLOODJHLVDSDUWRIWKHZKROHWKHPHSDUN 108 $V QRWHG LQ &KDSWHU 7KUHHWKUHHURXWHVWUDYHUVH+DLQDQIURPQRUWKWRVRXWKDQHDVWHUQ KLJKZD\DFHQWUDOURXWHDQGDZHVWHUQURXWHWKDWOLQNVWKHWRZQV$OOURXWHVUXQIURP+DLNRXWKH PDLQFLW\LQWKHQRUWKWR6DQ\DDPDMRUWRXULVWDUHDLQWKHVRXWK7KHHDVWHUQURXWHLVE\IDUWKH IDVWHVW DQG FRQVLVWV RI D PRGHUQ KLJKZD\ 7KH FHQWUDO URXWH WUDYHUVHV WKH /L $XWRQRPRXV 3UHIHFWXUHDQGWKHPDLQFRQFHQWUDWLRQRIWKH/LPLQRULW\VHWWOHPHQWVVXFKDVWKHFLWL HVRI7RQJ]KD DQG4LRQJ]KRQJWKDWKDYHWKHODUJHVW/LHWKQLFFRPPXQLWLHVZLWKDQGUHVSHFWLYHO\RI SRSXODWLRQ RI /L HWKQLFLW\ +DLQDQ 7RXU $WODV 5RDG FRQGLWLRQV DUH URXJK RQ WKH FHQWUDO URXWHGXHWRWKHMDJJHGPRXQWDLQRXVWRSRJUDSK\7KH ZHVWHUQURXWHFURVVHVWKHOHDVWGHYHORSHG SDUWRI+DLQDQDQGWRXULVPGHYHORSPHQWLVVWLOOLQLWVLQIDQF\GXHWRWKHODFNRIEDVLFLQIUDVWUXFWXUH 7KH ILUVW IRON YLOODJH RSHQHG LQ QHDU WKH FLW\ RI 7RQJ]KD LQ UHVSRQVH WR LQFUHDVHG WRXULVWV·GHPDQGIRU H[SHULHQFLQJHWKQLFFXOWXUHVZKHQGULYLQJGRZQWKHFHQWUDOURXWH7KHILUVW IRON YLOODJH FDOOHG ´)DQ 0DRµ ZDV DQ DFWXDO /L UHVLGHQWLDO FRPPXQLW\ 7RXULVWV VSHQW DQ KRXU WRXULQJWKHYLOODJHDQGH[SHULHQFLQJWKH´EDFN VWDJHµOLIHRIWKH/LPLQRULW\$W KDWFKHGKXWZDV EXLOW IRU HWKQLF GDQFH SHUIRUPDQFHV 7KH RULJLQDO LGHD RI WKH IRON YLOODJH ZDV QRW SULPDULO\ IRU FRPPHUFLDOSXUSRVHV,WZDVGHVLJQHGWRVKRZFDVHWKHHWKQLFFXOWXUHDQGOLIHWRVDWLVI\WKHWRXULVWV·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aikou City Qiongshan City Lingao County Wenchang City Chengmai County Danzhou City Changjiang Li Autonomous County Dingan County Tunchang County Baisha Li Autonomous Dongfang City County Qionghai City Qiongzhong Li and Miao Wanning City Tongzha City Autonomous County Baoting Li and Miao Autonomous County Ledong Li Autonomous County Lingshui Li Autonomous County Sanya City Figure 2 The Distribution of Folk Villages in 1999 Figure 6.4 The Distribution of Folk Villages in 1999 Haikou City Qiongshan City Lingao County Wenchang City Chengmai County Danzhou City Changjiang Li Autonomous County Dingan County Tunchang County Baisha Li Autonomous Dongfang City County Qionghai City Qiongzhong Li and Miao Wanning City Tongzha City Autonomous County Baoting Li and Miao Active Folk Villages Autonomous County Ledong Li Autonomous County Lingshui Li Autonomous County Closed Folk Villages Sanya City 01530km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·V ZKHQFXOWXUDOWRXULVPZDVSHUFHLYHGDVD´JROGUXVKµ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´WUDGLWLRQDOµ GDQFH SHUIRUPDQFHV KDYH EHFRPH ´PDQXIDFWXUHGµ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´UHFRQVWUXFWHG HWKQLFLW\µ 0HDQZKLOH VRPH LQGLJHQRXV FXOWXUHV DUH QRW XQDZDUH RI WKH HFRQRPLF DGYDQWDJHV RI SDFNDJLQJ WKHLUFXOWXUHVWRPHHWWRXULVWGHPDQGV7KHUHIRUHWKHUHLVDWHQVLRQEHWZHHQWRXULVPEXVLQHVVDQG LQGLJHQRXV SHRSOHV UHJDUGLQJ WKH RZQHUVKLS DQG SUHVHQWDWLRQ RI FXOWXUDO SURSHUW\ *UHHQZRRG FDOOHGWKLVVLWXDWLRQD´FRQIOLFWXDODUHQDµZKHQFRQIOLFWVD ULVHRYHUWKHULJKWVRZQHUVKLSDQG FRQVHQWRQWKH´ZKDWµDQG´KRZµRIWKHFXOWXUDOSUHVHQWDWLRQ ,QFRQVLGHULQJWKHTXHVWLRQRIDXWKHQWLFLW\RIWKHIRONYLOODJHVLQ+DLQDQRQHLVLPPHGLDWHO\ FRQIURQWHGZLWKDYDULDWLRQRIZKDW%RQQLIDFHDQG)RZOHU S KDYHWHUPHG´WKHPRYLQJ REMHFWVWRU\µ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·SHUVSHFWLYHLVWKURXJK ´EURFKXUHLPDJHVµ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´IUDPHµ DXWKHQWLFLW\ E\ OLVWLQJ ´W\SLFDOµ HWKQLF SHUIRUPDQFHV IRU WRXULVWV WR REVHUYH DQG UHFRUG RQ WKHLU WUDY HO WRXU )RU H[DPSOH WKH EURFKXUHRI%DRWLQJ$UHFD0DQRUH[SOLFLWO\VWDWHVWKDW´/LZRPHQZLOOGUHVVXSLQIXOOFHUHPRQLDO FRVWXPHVIRUWRXULVWVWRWDNHSKRWRVµ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´)HHOIUHHWRMRLQWKH/LPLQRULW\LQWKHLUGDLO\FKRUHVOLNHZHDYLQJ 114 FORWKHV IHHGLQJ WKHLU OLYHVWRFN ZDVKLQJ WKHLU FORWKHV DQG VZLPPLQJ LQ WKH ULYHUµ ,Q IDFW VXFK WHPSWLQJGHVFULSWLRQVUDUHO\WXUQLQWRUHDOLW\ $OORIWKHEURFKXUHVPHQWLRQ/LGDQFHHVSHFLDOO\WKHEDPERR EHDWLQJGDQFHRULQWKHFDVH RIWKH,QGRQHVLDQ9LOODJH,QGRQHVLD QHWKQLFGDQFHDVWKHNH\WRXULVWDWWUDFWLRQ+RZHYHUQRQHRI WKHYLOODJHEURFKXUHVGHSLFWVWRXULVWVGDQFLQJRULQWHUDFWLQJZLWKWKHLU/LKRVWV7KH/LSHRSOHDUH SUHVHQWHG DV REMHFWV IRU WRXULVWV WR YLHZ 7RXU LWLQHUDULHV ODUJHO\ GHVFULEH /L GDQFH DV D WRXULVW VSHFWDFOH ´PXGX FKXDQWRQJ /L ZXGDR KH \LQJ\XHµ ´:LWQHVV WKH /L GDQFH ZLWK WUDGLWLRQDO PXVLFµ DOWKRXJKDIHZLQYLWHWRXULVWSDUWLFLSDWLRQHJ´ MLQJTLQJFKDQMLDWDPHQGHGDFKDLZXµ ´GRQRWKHVLWDWHWR MRLQWKHPLQGRLQJWKHEDPERR EHDWLQJGDQFHµ &RQYLYLDOWRXULVWVPD\DOVR´MRLQWKHWULEDOUHYHOU\ LQWKHGDQFHKDOOµDQG´LPELEHWKHORFDOO\EUHZHGULFHZLQH¶ 6KDQODQ-LX·µ 7KH ZRUG DXWKHQWLF LV QRW ZLGHO\ XVHG LQ WKH WUDYHO EURFKXUHV ,QVWHDG WKH ZRUG ´WUDGLWLRQDOµLVRIWHQXVHGWRGHVFULE HWKH/LKRXVLQJZHOFRPHFHUHPRQ\/LGDQFHDQGULFHZLQH +RZHYHU PRVW WRXU LWLQHUDULHV UHIHU WR /L FXVWRPV VXFK DV WKH ZHOFRPH FHUHPRQ\ RU WKH DSSHDUDQFH RI /L KRXVLQJ DV ´SULPLWLYHµ 2Q WKH RWKHU KDQG DXWKHQWLFLW\ LV ZLGHO\ DVFULEHG WR WRXULVWPHDOVDYDLODEOHLQWKHYLOODJHPRUHE\ZKHUHDQGKRZWKHIRRGLVHDWHQUDWKHUWKDQFXOLQDU\ FRQWHQW%URFKXUHVVWDWHWRXULVWVZLOOH[SHULHQFH´ /L]KXVKHQ\DQ²FKDR[LVKDQJMLXFKDQµ ´D/LIHDVW²D QDWXUDOVW\OH GLQQHU RQ WKH PDWFRYHUHG IORRUµ RU WRXULVW V ZLOO VLPSO\ ´GLQH /L VW\OHµ 2WKHU EURFKXUHV XVH WKH PRUH IDQFLIXO WHUP ´MXQJOH IHDVWµ WR GHVFULEH WKH IRRG ZKHUH ´VQDFNV ZLOO EH VHUYHGLQQDWLYHVW\OHDWWKHULYHUEDQNµZLWKIRRGFRRNHGLQEDPERRLQWKHRQO\UHIHUHQFHWR/L FXOLQDU\WUDGLWLRQV 6RPHIRONYLOODJHVIXUWKHUOLQNDXWKHQWLFLW\ZLWKWKHW\SHRIWUDYHODQGWKHGLVWDQFHWUDYHOOHG )RU H[DPSOH 7RQJ]KD /L IRON YLOODJH LV GHVFULEHG DV D ´UHDO DGYHQWXUHµ ZKHUH WRXULVWV FDQ H[SHULHQFHWKH´QDWXUDOOLIHVW\OHµDQGVHDUFKIRUDXWKHQWLF/LFXVWRPV 7KHVHDUFKIRUDXWKHQWLFLW\ UHODWLYHWRWKHGLVWDQFHWUDYHOOHGSURYLGHVDPDUNHWLQJGHYLFHWRVHOOWKHYLOODJHWRXU7KHEURFKXUHV 115 GHVFULEHWKHYLOODJHVORFDWHGRQWKHFHQWUDOURXWHDV´PRUHSULPLWLYHµVLQFHWKH\DUH´ORFDWHGGHHSLQ WKH:X]KL6KDQ )LYH)LQJHU0RXQWDLQ µ $FFRUGLQJ WR WKH GLUHFWRU RI WKH 6DQ\D IRON YLOODJH WKH REMHFWLYH RI WKH YLOODJH LV WR ´IDLWKIXOO\ SRUWUD\ WKH OLIH FXVWRPV DQG FRQGLWLRQV RI WKH /L PLQRULW\ LQ WKH YLOODJHµ 3HUVRQDO FRPPXQLFDWLRQE 7KH´LQKDELWDQWVµ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·QHHGWKHHQGUHVXOWLVDPL[RIWKHDXWKHQWLFDQGWKH DUWLILFLDO ,Q WKH IRON YLOODJHV WKHUROHRIQRQ FRPPHUFLDOL]DWLRQLVH[SRVHGE\WKHH[SUHVVHGSROLF\ IURPWKHJRYHUQPHQWDOLQVWUXFWLRQ´RULJLQDWLQJIURPUHDOOLIHEXWULVLQJDERYHLWDQGGLVFDUGLQJWKH GURVVDQGVHOHFWLQJWKHHVVHQWLDOµ3DUDGR[LFDOO\IROORZLQJWKLVGLFWXPERWKUHDOLW\DQGXQUHDOLW\DUH KHLJKWHQHG7KLVNLQGRIPL[RIHQWHUWDLQPHQWDQGHGXFDWLRQRI DXWKHQWLFLW\DQGIDEULFDWLRQKDV EHHQ VHHQ E\ VRPH FRPPHQWDWRUV DV D PDQLIHVWDWLRQ RI SRVW PRGHUQLVP 8UU\ )RU (FR 116 S LWZDV´K\SHUUHDOLW\µ,QWKLVFRQWH[WWKHIRONYLOODJHVLQ+DLQDQFRXOGEHGHVFULEHGDV ´DVHPLRWLFV\VWHPZKHUHE\ DVHWRIVLJQVPDUNVWKHGLVSOD\VDVDXWKHQWLFERWKZLWKUHVSHFWWRWKH PDUNHUVWKHPVHOYHVDQGWRWKHRXWVLGHZRUOGµ +DUNLQS ,QWKHTXHVWIRUDXWKHQWLFLW\ WKHEXLOGLQJVDQGWKHPDWHULDOLWHPVIRUPWKHEDFNGURSIRUSHRSOHDVREMHFWVDQG WRWKHYLVLWRUVWKH\ PD\ VHHP WR EH HQJDJHG LQ QRW DFWLQJ WKHLU ´WUDGLWLRQDOµ OLIHVW\OHV LQ ´QRQ FRPPHUFLDOµ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´PXVHXPLILFDW LRQµ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·VLQWHUQDOG\QDPLFVRI 117 RQJRLQJ FKDQJH UDWKHU WKDQ DV DQ XQFRQWUROODEOH IRUFH EHDULQJ GRZQ XSRQ ORFDOV \LHOGV D PR UH DFFXUDWHYLHZRIWKHVLWXDWLRQLQ+DLQDQ &XOWXUDOHYROXWLRQLVDQRQJRLQJSURFHVV7KHFRQWUDGLFWLRQVRIFXOWXUDOWRXULVPDUHQRWWKDW LW ERWK ´GHVWUR\Vµ DQG ´SUHVHUYHVµ FXOWXUH 5DWKHU WRXULVP LV LWVHOI SDUW RI WKH LQKHUHQWO\ FRQWUDGLFWRU\SURFHVV RIFXOWXUDOFKDQJHDVVRFLDWHGZLWKPRGHUQLW\ 2DNHV :RRG S SRLQWHGRXWWKDW :KDWLVWUDGLWLRQDOLQFXOWXUHWKHVSHFLILFDWLRQRIOLQNVEHWZHHQDQLQYHQWHGSUHVHQWDQGDQLPDJLQHGSDVWLV FRQVWDQWO\EHLQJV\PEROLFDOO\UHFUHDWHGDQGFRQWHVWHG7KHUHLVQRREMHFWLYHERXQGHGWKLQJWKDWZHFDQLGHQWLI\ DV´WUDGLWLRQDOFXOWXUHµDJDLQVWZKLFKWRPHDVXUHDQGMXGJHFKDQJH:KDWLVGHILQHGDVWUDGLWLRQDOFXOWXUH ERWKIRUWKHSDVWDQGIRUWKHSUHVHQWLVFRQVWDQWO\EHLQJUHIRUPXODWHG 7KHSDUDGR[EHWZHHQFXOWXUDOHYROXWLRQDQGPXVHXPLILFDWLRQLVHYLGHQWLQ+DLQDQ7KHPDMRULW\RI WKHHWKQLF/LPLQRULW\KDVEHHQ´+DQLVHGµ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´PXVHXPLILFDWLRQµ 7KH IRON YLOODJHV LQ +DLQDQ SURYLGH DQ LQWHUHVWLQJ SLFWXUH WKRVH ZHDULQJ WUDGLWLRQDO /L GUHVV PD\ QRW EH /L ZKLOVW WKRVH ZHDULQJ +DQ GUHVV PD\ QRW EH +DQ 7KH SUHVHQWDWLRQVRIIRONYLOODJHVWHQGWREHLQDKLJKVWDWHRI´PXVHXPLILFDWLRQµSRUWUD\LQJWUDGLWLRQDO DVSHFWVRI/LFXOWXUHVZKLFKDUHDVVXPHGWREHDQFLHQWH[RWLFDQGIRV VLO7KHYLOODJHVDUHOLNHWKHPH SDUNV ZKHUH ´IURQW VWDJHµ DQG ´EDFN VWDJHµ DUH WRWDOO\ VHSDUDWHG 7RXULVP EXVLQHVV SD\V PRUH DWWHQWLRQWRPHHWLQJWKHH[SHFWDWLRQRIWRXULVWVDQGSRVLWLRQVVHOHFWHGDVSHFWVRI/LFXOWXUHLQDQ HQWHUWDLQLQJZD\:KDWLVOHIWIRUWRXULVWVLVDQLQFRPSOHWHDQGVXSHUILFLDOLPDJHRI/LFXOWXUH (FRQRPLF'HYHORSPHQWYHUVXV&XOWXUDO3UHVHUYDWLRQ 7RXULVPLVDSURFHVVRIHFRQRPLFGHYHORSPHQWDQGLQWHJUDWLRQLQZKLFKWKHLGHDRISODFHPD\EH ´FRPPRGLILHGµ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´IDUPHUV·PDUNHWVµ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·WKDYHPXFK LQIOXHQFHRQFXOWXUDOSUHVHUYDWLRQ7KHFXOWXUDOSUHVHUYDWLRQVKRXOGEHWDNHQFDUHRIE\WKHJRYHUQPHQW &XOWXUDOSUHVHUYDWLRQVHHPVWREHDQR[\PRURQLQWKHYLOODJHFRQWH[W,QIDFWFXOWXUDOUHVRXUFHV ZHUH EHLQJ H[SORLWHG IRU FRPPHUFLDO SXUSRVHV DQG S UHVHUYDWLRQ FRXOG GLVORGJH WKH SUHVHQW HFRQRPLF GHYHORSPHQW )XUWKHU WRXULVP EXVLQHVVHV LQ +DLQDQ KDYH D SRVLWLYH YLHZ RQ FRPPRGLILFDWLRQRIFXOWXUH&XOWXUDOSUHVHUYDWLRQZDVRIWHQUHIHUUHGWRDVWKH´TXDLQWµFXVWRPVRI WKH/LSHRSOHDQGRWKHU´H[RWLFµ FXVWRPV7KURXJKHVWDEOLVKLQJWRXULVWIRONYLOODJHVWKHEXVLQHVVHV SURYLGHHGXFDWLRQRSSRUWXQLWLHVIRUYLVLWRUVDQGGHILQHNH\GLVWLQFWLRQVEHWZHHQ/LFXOWXUHDQGWKH WRXULVWV·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´JUDVV URRWVµSKHQRPHQRQDQGKDVUHFHLYHGOLWWOH DWWHQWLRQ IURP WKH JRYHUQPHQW )RU H[DPSOH WKH LQWHUYLHZV ZLWK WKH RIILFLDOV IURP WKH +DLQDQ 7RXULVP %XUHDX VXJJHVWHG WKDW OLWWOH LQIRUPDWLRQ RQ IRON YLOODJHV FDQ EH REW DLQHG IURP WKH SURYLQFLDOOHYHORIJRYHUQPHQW QRQHRIWKHRIILFLDOVNQHZWKHQXPEHURIIRONYLOODJHVWKDWH[LVWHG LQ+DLQDQ7KHUHDVRQVIRUVXFKLJQRUDQFHDUHDVIROORZV 7KH RSHUDWLRQ RI IRON YLOODJHV LV VPDOO VFDOH DQG UHODWLYHO\ LQVLJQLILFDQW IRU SU RYLQFLDO WRXULVP SODQQLQJ ,Q JHQHUDO WKHVH IRON YLOODJHV ZHUH UXQ E\ SULYDWH EXVLQHVVHV DQG UHTXLUHG OLWWOH LQYHVWPHQW IURP WKH VWDWH )XUWKHU WKH ORFDWLRQV RI PDQ\ RI WKHVH YLOODJHV ZHUHUHPRWHDQG GLIILFXOWWRDFFHVV)RUH[DPSOHEHIRUHWKHHVWDEO LVKPHQWRIWKHHDVWHUQIUHHZD\LQWKH PDMRULW\ RI YLOODJHV ZHUH ORFDWHG LQ WKH PRXQWDLQRXV FHQWUDO UHJLRQ ZKHUH WKH MRXUQH\ IURP +DLNRXWRWKHFHQWUHWRRNDWOHDVWKRXUV 7KHWRXULVPLPDJHRI+DLQDQLVSULPDULO\EDVHGRQVXQVHDVDQGDQGVH[7K HGHYHORSPHQWRI FXOWXUDOWRXULVPLVVWLOOLQLWVLQIDQF\DQGKDVEHHQVHHQDVDQ´DGG RQµ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´DXWKHQWLFLW\µ DQG ´TXDLQWQHVVµ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´LPDJLQHGFRPPXQLWLHVµWRVDWLVI\WRXULVWV·QHHGVDQGZDQWV)XUWKHUVRPH 123 ORVWWUDGLWLRQVKDYHEHHQUHLQYHQWHGZLWKDQHZORRN$O WKRXJKVWDWHUHJXODWLRQVHUYHVWRVWUHQJWKHQ FXOWXUDOLQWHJUDWLRQDQGHFRQRPLFGHYHORSPHQWYLOODJHEXVLQHVVHVLQ+DLQDQZHUHYHU\LQWHUHVWHGLQ DXWKHQWLFDWLQJHWKQLFUHVRXUFHVIRUWKHWRXULVWLFJD]H 0DVV7RXULVP'HYHORSPHQWYHUVXV6XVWDLQDEOH&XOWXUDO7RXULVP 6XVWDLQDEOH GHYHORSPHQW LV ´GHYHORSPHQW WKDW PHHWV WKH QHHGV RI WKH SUHVHQW ZLWKRXW FRPSURPLVLQJWKHDELOLW\RIIXWXUHJHQHUDWLRQVWRPHHWWKHLUQHHGVµ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´UHDOµ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´VXVWDLQDEOHµ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´UHGH\HVµ LQ&KLQHVHPHDQV´JUHHQZLWKHQY\µ DQGZLOOFDXVHDGLIILFXOWWLPHIRURXUIXWXUHEXVLQHVV 125 7KH FRPPHQWV IURP WKH GLUHFWRU RI WKH ,QGRQHVLD 9LOODJH UHIOHFWHG D GHHSFRQFHUQ RYHUWRXULVP SODQQLQJLQWKHORQJUXQ$OWKRXJKHWKQLFFXOWXUH·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´DQ DOUHDG\ FRPSOH[ VLWXDWLRQ LV H[DFHUEDWHG E\ DPELJXLWLHV ODFN RI DZDUHQHVVDQGRUWKHPLVXQGHUVWDQGLQJRIFXOWXUDOEHKDYLRXUVWDQGDUGVRIODQJXDJHRURIUHODWLRQDO GLPHQVLRQVVXFKDVFRQILGHQWLDOLW\RUVWDWXVµ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·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·QHHGVDQGZDQWVWRXULVWVDUH VHHQ DV LPSRUWDQW VWDNHKROGHUV LQ DXWKHQWLFDWLQJ HWKQLF FXOWXUDO UHVRXUFHV 7KH LVVXH RI DXWKHQWLILFDWLRQIURPDWRXULVWSHUVSHFWLYHLVWKHIRFXVRIWKLVFKDSWHU 3UHYLRXVUHVHDUFK 0RVFDUGRDQG3HDUFH(GHQVRU RQHWKQLFWRXULVWVKDVXVXDOO\ UHOLHGRQLQGLYLGXDOFDVHVWXGLHVZLWKWKHUHVXOWWKDWLQVLJKWVKDYHEHHQOHVVFXPXODWLYHWKDQWKH\ PLJKW RWKHUZLVH KDYH EHHQ ,Q RWKHU ZRUGV IHZ FRPSDUDWLYH VWXGLHV IDFLOLWDWH XQGHU VWDQGLQJ RI FXOWXUDO WRXULVWV LQ GLIIHUHQW ORFDWLRQV 6HFRQG WKH PDMRULW\ RI UHVHDUFK KDV SUHVXPHG WKDW WKH WRXULVWV YLVLWLQJ FXOWXUH RULHQWHG GHVWLQDWLRQV VKRXOG TXDOLI\ DV ´FXOWXUDO WRXULVWVµ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·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·UHVSRQVHVWRGLI IHUHQWFXOWXUHV/LDQG,QGRQHVLDQ )LJXUH VKRZV WKH ORFDWLRQV RI WKH WKUHH YLOODJHV 0RUH GHWDLOHG LQIRUPDWLRQ RQ HDFK YLOODJH IROORZV )LJXUH7KH/RFDWLRQVRI7KUHH)RON9LOODJHVLQ+DLQDQ Haikou City Qiongshan City Wenchang City Lingao County Danzhou City Chengmai County Dingan County Changjiang Li Autonomous County Tunchang County Qionghai City Indonesian Village Dongfang City Wanning City Tongzha City Baoting Areca Manor Baoting Li and Miao Lingshui Li Autonomous County Autonomous County Sanya City Sanya Li Folk Village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·VKRZHYHULWSD\ VPRUHDWWHQWLRQWRWKH´ZRUNOLIHORYHDQG IHVWLYDOVµ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´WKH PRVW VXFFHVVIXO IRON YLOODJH LQ +DLQDQµ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·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·SURILOHVIURPWKUHHYLOODJHVDUHYHU\VLPLODU 7KHRYHUDOOVDPSOHKDVPRUHPDOHVWKDQIHPDOHV LH,QGRQHVLDQ9LOODJHKDGPDOH UHVSRQGHQWV %DRWLQJ DQG 6DQ\D 6XFK JHQGHULPEDODQFHFDQEHH[SODLQHGE\WKHIDFWWKDW+DLQDQ WRXULVPKDVORQJEHHQPDOHRULHQWHG7KHLPDJHRIVXQVHDVDQGVH[VHUYHVWRDWWUDFWPDOHWRXULVWV $OWKRXJKWKHPDMRULW\RIWRXULVWV·DJHVUDQJHGI URPWRDVOLJKWGLIIHUHQFHH[LVWHGDPRQJWKH WKUHHYLOODJHV%DRWLQJKDVWKHODUJHVWQXPEHULQWKH DJHJURXS DQGWKHVPDOOHVWQXPEHU RI DJH JURXS )LJXUH ,W LV QRW NQRZQ ZK\ WKLV GLIIHUHQFH LQ DJH FRPSRVLWLRQ EHWZHHQVLWHVZDVIRXQG$FKLVTXDUHWHVWLQGLFDWHGWKDWWKHUHH[LVWHGQRVLJQLILFDQWGLIIHUHQFHRI 136 WRXULVWV·LQFRPHLQWKHWKUHHYLOODJHV ; GI 3 7KHDYHUDJHRIVXUYH\HGWRXULVWV ZDVDURXQGWR\XDQ & ² SHUPRQWK )LJXUH )LJXUH7KH$JH*URXSVRI6XUYH\HG9LVLWRUV 50 45 40 35 30 Percentage 25 Baoting 20 15 Sanya 10 Indonesian 5 0 < 20 20-30 31-40 41-50 51-60 > 60 years years Age &KLVTXDUH GI 3 )LJXUH7KH,QFRPHRI6XUYH\HG9LVLWRUV 50 40 Indonesian Baoting 30 Sanya Percentage Sanya 20 Indonesian 10 Baoting 0 < 400 401-800 801- 1,201- 1,601- > 2,001 1,200 1,600 2,000 Income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·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´RQWRXUµLVWKHPDMRUUHDVRQWRYLVLWWKHIRONYLOODJH2YHURIUHVSRQGHQWVLQERWK%DRWLQJDQG 6DQ\DYLOODJHVLQGLFDWHGWKDWDYLOODJHWRXULVDSDUWRIWKHWRXUSURJUDPDUUDQJHGE\WUDYHODJHQF LHV $OPRVW RQH WKLUG RI UHVSRQGHQWV LQ ,QGRQHVLDQ 9LOODJH UHSRUWHG WKH WULS DV ´SHUVRQDO ZDQWµ KRZHYHUPRVWVWLOOSDUWLFLSDWHGLQWKHSDFNDJHWRXUIRUHDV\DFFHVV7KH,QGRQHVLDQ9LOODJHLVFORVHU WRDQGPRUHDFFHVVLEOHIURPWKHPDLQFLW\+DLNRXDQ GWKLVPD\UHGXFHVOLJKWO\WKHUHOLDQFHRIWKH YLOODJHRQLQGHSHQGHQWWUDYHOOHUV 7DEOH7KH5HDVRQVIRU9LVLWDWLRQ 5HDVRQ %DRWLQJ 6DQ\D ,QGRQHVLDQ 7RXU3URJUDP 3HUVRQDO:DQW 2WKHUV &KLVTXDUH GI 3 $FKLVTXDUHWHVWIRUWRXULVWV·SHUFHSWLRQRIDXWKHQWLFLW\VKRZHGQRVLJQLILFDQWGLIIHUHQFHEHWZHHQ WKHVWXG\VLWHV ; GI 3 9LVLWRUVLQWKHWKUHHYLOODJHVH[KLELWHGVLPLODUYLHZVRQ WKHLVVXHRIDXWKHQWLFLW\7DEOHF RPSDUHVWKHWRXULVWV·SHUFHSWLRQVRIDXWKHQWLFLW\LQWKHWKUHH 139 YLOODJHVRIUHVSRQGHQWVSHUFHLYHG%DRWLQJDVDQDXWKHQWLFSUHVHQWDWLRQRIHWKQLFFXOWXUH LQ6DQ\DDQGLQWKH,QGRQHVLDQYLOODJH+RZHYHUDVXEVWDQWLDOSRUWLRQRIUHVSRQGHQWVGL GQRW YLHZ WKH IRON YLOODJHV DV DXWKHQWLF LQ %DRWLQJ LQ 6DQ\D DQG LQ WKH ,QGRQHVLDQ YLOODJH $WWKHVDPHWLPHDODUJHSURSRUWLRQRIUHVSRQGHQWVFODLPHG´GRQ·WNQRZµZLWKRI UHVSRQGHQWVLQ%DRWLQJLQ6DQ\DDQGLQ,QGRQHVLDQ9L OODJHH[SUHVVLQJWKLVYLHZ 7DEOH3HUFHSWLRQRI$XWKHQWLFLW\ %DRWLQJ 6DQ\D ,QGRQHVLDQ $XWKHQWLF ,QDXWKHQWLF 'RQ·W.QRZ &KLVTXDUH GI 3 7KH ILQGLQJV VXJJHVW WKDW D PDMRULW\ RI WRXULVWV Y LVLWHG WKH IRON YLOODJH DV D SDUW RI D UHFUHDWLRQDO SURJUDPDQGWKDWWKHLUSHUFHSWLRQVRIDXWKHQWLFLW\ZHUHEOXUUHG$ODUJHSURSRUWLRQRIWRXULVWVGLG QRWKDYHDFOHDUSLFWXUHRIHWKQLFDXWKHQWLFLW\)XUWKHUPRUHRQO\DIUDFWLRQRIWRXULVWVLQDOOWKUH H YLOODJHVZDVIDPLOLDUZLWKHWKQLFFXOWXUHVSULRUWRDUULYDO 7DEOH $JUHDWPDMRULW\MXGJHGWKHLU NQRZOHGJH RI HWKQLF FXOWXUHV DV ´VXSHUILFLDOµ LQ %DRWLQJ LQ 6DQ\D DQG LQ WKH ,QGRQHVLDQ9LOODJH $WWKHVDPHWLPHQHDUO\RIUHVSR QGHQWVLQHDFKYLOODJHFODLPHGWKDWWKH\ ´GRQ·WNQRZµ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·W.QRZ &KLVTXDUH GI 3 )LJXUH)DPLOLDULW\ZLWK(WKQLFLW\ 60 50 40 Percentage 30 Baoting Sanya 20 Indonesian 10 0 Culture History Folklore Dance/Song Others themes &KLVTXDUH GI 3 7KHILQGLQJVVXJJHVWWKDWWRXULVWVLQ+DLQDQDUHQRWSUHSDUHGIRUDWRXUR IDYLOODJHDQGWKDWWKHLU NQRZOHGJHRIHWKQLFLW\LVVXSHUILFLDO,QIDFWWKHWRXULVDUUDQJHGE\WUDYHODJHQFLHVZKLFKSULRULWL]H WKH DFFHVVLELOLW\ RI WKH ORFDWLRQ 7KH WRXULVWV· SHUFHSWLRQV RI DXWKHQWLFLW\ ZHUH EOXUUHG JLYHQ WKH VLWXDWLRQ WKDW WRXULVWV NQHZ OLWWOH RI HWKQLF FXOWXUHV 2I WKRVH ZKR H[SUHVVHG IDPLOLDULW\ ZLWK HWKQLFLW\ WKH PDMRULW\ UHOLHG XSRQ VSHFWDFXODU LPDJHV WR HYDOXDWH DXWKHQWLFLW\ 7KHVH LPDJHV HQFRPSDVVHG GDQFH DQG VRQJ SHUIRUPDQFH RU IRONORUH ZLGHO\ VKRZQ LQ WKH PDVV PHGLD 0 DQ\ 141 WRXULVWV DUH QRW DZDUH RI RWKHU DVSHFWV RI HWKQLF KLVWRU\ RU IRONORUH )URP WKH VXUYH\ D ODUJH QXPEHU RI WRXULVWV H[SUHVVHG ´GRQ·W NQRZµ DQG ´QR RSLQLRQVµ WRZDUGV HWKQLFLW\ UHIOHFWLQJ WKDW WKHVHWRXULVWVFRXOGQRWEHYLHZHGDVWUXH´FXOWXUDOWRXULVWV µ5DWKHUWKH\ZHUHLQFLGHQWDOYLVLWRUVWR DFXOWXUDOWRXULVPDWWUDFWLRQ &XOWXUDO(YROXWLRQYHUVXV0XVHXPLILFDWLRQ $V QRWHG LQ &KDSWHU WRXULVP EXVLQHVVHV FDWHU IRU WRXULVWV DQG IRON YLOODJHV SURYLGH VHOHFWHG FXOWXUDO H[SUHVVLRQV WR PHHW WRXULV WV· H[SHFWDWLRQ )LJXUH UHSRUWV WRXULVWV·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´YHU\ H[RWLFµ 0DQ\ WRXULVWV FRPPHQWHG WKDW WRXULQJ WKH YLOODJH SURYLGHGDQH[FHOOHQWRSSRUWXQLW\WRNQRZWKH,QGRQHVLDQFXOWXUHDQGWKH IRONORUHLQ6RXWKHDVW$VLD ZLWKRXW JRLQJ DEURDG &RPSDUDWLYHO\ WKH SHUFHQWDJHV RI LQWHUHVWV IURP UHVSRQGHQWV LQ 6DQ\D 9LOODJHZHUHORZHUWKDQLQWZRRWKHUYLOODJHV3HUKDSVWKLVLVEHFDXVHWRXULVWVVSHQWOHVVWLPHKHUH WRXULQJWKHYLOODJHDVWUDYHODJHQ WVZHUHDQ[LRXVWRPRYHWKHPRQWRWKHFLW\RI6DQ\DIRUVKRSSLQJ DQGGLQLQJ 142 )LJXUH7KH,QWHUHVWLQJ6SRWVLQ)RON9LOODJHV 60 50 40 Percentage 30 Baoting 20 Sanya Indonesian 10 0 Architecture Dance Ethnic Ethnic Scenery Others Performance Clothing Children Interesting Spots &KLVTXDUH GI 3 7RXULVWV H[SUHVVHG D KLJK GHJUHH RI LQWHUHVW LQ HWKQLF FXVWR PV DQG IRONORUH +RZHYHU WKH\ IHOW IUXVWUDWHGWKDWWKH\ZHUHXQDEOHWRILQGDQ\KHOSLQGHHSHQLQJWKHLUXQGHUVWDQGLQJ)RUH[DPSOH WRXULVWVLQGLFDWHGWKDWWKH\ZRXOGOLNHWROHDUQDERXWWKHHVVHQFHRIHWKQLFDUFKLWHFWXUHEXWQRERG\ H[SODLQHGLWWRWKHP(YHQWKHYLOODJHHPSOR\HHVGLGQRWNQRZKRZWRH[SODLQWKHVLJQLILFDQFHRID ´ERDWVKDSHGKRXVHµ$WWKHVDPHWLPHPDQ\WRXULVWVIRXQG´H[RWLFQHVVµWREHDJRRGLQGLFDWRU ZLWKZKLFKWRHYDOXDWHWKHTXDOLW\RIWKHWRXU5HPDUNVVXFKDV´ZHOLNHWRVH HGLIIHUHQWFORWKLQJµ DQG´ZHZDQWWRNQRZZK\WKH\DUHZHDULQJVKRUWVNLUWVµUHIOHFWWKHFXULRVLW\RIWRXULVWVDQGWKHLU LQWHUHVWLQHWKQLFLW\$SSDUHQWO\WRXULVWVKDGDQXQFOHDUSLFWXUHRI/LFXOWXUHDQGPDQ\FRQFOXGHG DIWHU WRXULQJ WKH YLOODJH WKDW WKLV HWKQLFPLQRULW\LVEDFNZDUGHFRQRPLFDOO\DQGVRFLDOO\ EHFDXVH WKH\ZHUHQRW´PRGHUQµ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·GHVLUHWRSURGXFHVRPH´K\SHU UHDOLW\µ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aoting 15 Sanya Indonesian Percentage 10 5 0 0 10 50 100 200 >200 Chinese Yuan &KLVTXDUH GI 3 7DEOHVKRZVWKHLWHPVSXUFKDVHGLQIRONYLOODJHV$ODUJHSURSRUWLRQRIVRXYHQLUSXUFKDVHVFDQ EHFDWHJRUL]HGDVORFDOVSHFLDOWLHVVXFKDVWURSLFDOIUXLW HJPDQJRDUHFDO\FKHH KHUEDOWHD DQG &KLQHVH PHGLFLQH 7RXULVWV ZHUH DOVR LQWHUHVWHG LQ SXUFKDVLQJ HWKQLF WULQNHWV DQG FORWKLQJ 6XUSULVLQJO\WKHSHUFHQWDJHRIWRXULVWVZKRSXUFKDVHG´HWKQLFWULQNHWVµ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· SURSHQVLW\ W R DSSUHFLDWHHWKQLFSURGXFWVDQGSXUFKDVHVRXYHQLUV $VSOHWDQG&RRSHU 7KHUHVXOWVVXJJHVW WKDW WKH HWKQLF VRXYHQLU PDUNHW LQ +DLQDQ LV VWLOO LQ LWV LQIDQF\ DQG FUDIW VRXYHQLUV UHPDLQ WR EH GHYHORSHGDQGSURPRWHG$OWKRXJKWRXULVWVH[SUHVVHGDGH VLUHWRVHHNFUDIWVRXYHQLUVUHSUHVHQWLQJ WKHYLOODJHFXOWXUHUHODWHGPHUFKDQGLVHDSSHDUHGWREHVFDQWLQWKHWKUHHYLOODJHV,QSDUWLFXODUWKH ,QGRQHVLDQ9LOODJHZLWKDVWURQJWKHPHRI,QGRQHVLDQ&KLQHVHKDVQRWGHYHORSHGDVLQJOHVRXYHQLU WR DWWUDFW WRXULVWV·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·VXJJHVWLRQV7KHRSWLRQ RI´YLOODJHH[SDQVLRQµ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´LI/LSHRSOH UDQWKLVYLOODJHLWPD\EHPRUHDXWKHQWLFµ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´GRQ·WNQRZµ $TXDUWHURIUHVSRQGHQWVVDLG´ JRYHUQPHQWDO LQYROYHPHQW FDQ UHJXODWH WKH WRXULVP PDUNHW LQ SDUWLFXODU WKH DFWLYLWLHV RI WKH LQIRUPDOVHFWRULQWKHYLOODJH6RPHWRXULVWVFRPSODL QHGWKDWQRZDUUDQW\RISURGXFWVH[LVWHGLQWKH YLOODJH WR IDOO EDFN RQ LI WKH SXUFKDVHG VRXYHQLUV ZHUH QRW VDWLVIDFWRU\ ´:KDW LI , ERXJKW IDNH MHZHOOHU\RUURWWHQIUXLWVLQWKHYLOODJH"µ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·DQGKRVWV·SHUFHSWLRQVRIVHUYLFHSURYLGHUVPD\KDYHGLIIHUHQW LPSOLFDWLRQV IRU WKH DVVHVVPH QW RI VHUYLFH TXDOLW\ 4XDOLWLHV VXFK DV EHLQJ IULHQGO\ SURPSW DQG KHOSIXOPD\KDYHGLIIHUHQWPHDQLQJVLQGLIIHUHQWFXOWXUHV7KHUHIRUHWKHUHLVJUHDWVFRSHIRUWKH GHYHORSPHQW RI QHJDWLYH SHUFHSWLRQV RI VHUYLFH TXDOLW\ E\ WRXULVWV 7KH QHHG WR FDWHU WR WKRVH H[SHFWDWLRQV DFFRUGLQJ WR WKH WRXULVWV· GHILQLWLRQV RI VHUYLFH TXDOLW\ LV LPSRUWDQW IRU VXVWDLQDEOH GHYHORSPHQW6LQFHWRXULVWV·H[SHFWDWLRQVDUHVKDSHGE\WKHLUFXOWXUHWKHLUFXOWXUHLVWKHEDVLVIRU H[SHFWHGVHUYLFHVWDQGDUGV,WFDQEHDU JXHGWKDWWKHWRXULVWV·H[SHFWDWLRQVDUHDOVRVKDSHGE\RWKHU IDFWRUVVXFKDVPHGLDLQWHUPHGLDULHVHWF+RZHYHUDOWKRXJKRWKHUIDFWRUVH[LVWWKHLQIOXHQFHRI FXOWXUHRQLQGLYLGXDOVLVDUJXDEO\WKHPRVWLPSRUWDQW 3RUWHUDQG6DPRYDU 7DEOHSUHVHQWVPHDQUDWLQJVRIVDWLVIDFWLRQLQWKHWKUHHYLOODJHVLWHVUDQJLQJIURP YHU\ XQVDWLVIDFWRU\ WR YHU\VDWLVIDFWRU\ 2YHUDOOWKHUDWLQJVLQWKUHHYLOODJHVZHUHYHU\VLPLODU &KL VTXDUH GI 3 DQGJHQHUDOO\SRVLWLYHWRXULVWVS URYLGHGDQDERYHDYHUDJHLPSUHVVLRQRI WKHRYHUDOOTXDOLW\ZLWKLQ%DRWLQJLQ6DQ\DDQGLQWKH,QGRQHVLDQ9LOODJH$PRQJDOOWKH DWWULEXWHVWKHUHVSRQGHQWVJDYHKLJKHVWPDUNVIRUWKHTXDOLW\RIWKHWRXUJXLGHZLWKLQ%DRWLQJ LQ 6DQ\D DQG LQ WKH ,QGRQHVLDQ 9LOODJH 7KLV LV SHUKDSV VXUSULVLQJ JLYHQ WKH ODFN RI LQWHUSUHWDWLRQDWWKHIRONYLOODJHVEXWLWSUREDEO\UHIOHFWVWKHLUUROHLQWKHHQWLUHWRXUZKLFKPD\ODVW VHYHUDOGD\V$WWKHVDPHWLPHWRXULVWVH[SUHVVHGWKHOHDVWVDWLV IDFWLRQLQWKHKLJKWLFNHWSULFLQJ 149 ZLWKLQ%DRWLQJDQGLQ6DQ\D0DQ\WRXULVWVLQ%DRWLQJDOVRIHOWGLVVDWLVILHGZLWKWKHTXDOLW\ RIVRXYHQLUVZLWKDPHDQUDWLQJRI 7DEOH0HDQ5DWLQJVRI6DWLVIDFWLRQLQ)RON9LOODJHV $WWULEXWH %DRWLQJ 6DQ\D ,QGRQHVLDQ 9LOODJH/RFDWLRQ $UFKLWHFWXUDO'HVLJQ 'DQFH3HUIRUPDQFH (WKQLF&ORWKLQJ 6RXYHQLU4XDOLW\ 6WDII4XDOLW\ 7RXU*XLGH4XDOLW\ 7LFNHW3ULFLQJ 2YHUDOO,PSUHVVLRQ 1RWHUDWLQJVFDOHUDQJHGIURPYHU\XQVDWLVIDFWRU\WRYHU\VDWLVIDFWRU\ &KLVTXDUH GI 3 :KHQ DVNHG DERXWWKHIXWXUHSURVSHFWVIRUIRONYLOODJHVWKHPDMRULW\RIWRXULVWVUHSOLHG´NHHSLW RULJLQDOµRU´LPSURYHVHUYLFHTXDOLW\µ7KH\EHOLHYHGWKHIRUPRIPDVVWRXULVPLQ+DLQDQZRXOG FRQWLQXHLQWKHQHDUIXWXUH7KHGLVWLQFWLRQVEHWZHHQPDVVWRXULVPDQGVXVWDLQDEOHWRXULVPZHUH QRW LPSRUWDQW IURP WRXULVWV· SHUVSHFWLYHV 7RXULVWV YLVLWHG WKH YLOO DJH DV D SDUW RI WKH WRXULVP SURJUDPVDQGKDGIHZLGHDVIRUYLOODJHGHYHORSPHQWLQWKHORQJUXQ 6XPPDU\ 7KLVFKDSWHUSURYLGHVDQDQDO\VLVRIYLVLWRUVXUYH\VLQWKUHHVHOHFWHGYLOODJHVDQGVRPHLQVLJKWVLQWR WKHDWWULEXWHVRIYLVLWRUVDWWKHVHF XOWXUDOWRXULVPDWWUDFWLRQV,WLVQRUPDOIRUWRXULVWVRIDQRWKHU FXOWXUH WR EH ERWK IDVFLQDWHG DQG DSSUHKHQVLYH DERXW D GHVWLQDWLRQ·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´FXOWXUDOWRXULVWVµ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´PXVHXPLILHGµ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·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´GDWD UHYHDOLQJµ 0F&UDFNHQ 5LOH\ DQG L V FRQVLGHUHG D SRZHUIXOWRROIRUJDLQLQJLQVLJKWVLQWRWKHVRFLDOO\FRQVWUXFWHGUHDOLWLHVRILQGLYLGXDOV .YDOH $OO WKH GDQFH SHUIRUPHUV ZHUH FKRVHQ ZLWK WKH DVVLVWDQFH RI WKH FKLHI H[HFXWLYH RIILFHUV RI WKH YLOODJHV )XUWKHU WKH UHVHDUFKHU VSHQ W WZR ZHHNV LQ %DRWLQJ $UHFD 0DQRU DQG WKH ,QGRQHVLDQ 9LOODJH DQG WKH VXUURXQGLQJ HWKQLF FRPPXQLWLHV WR REVHUYH DFWLYLWLHV LQ RUGHU WR JHW DQ LQ GHSWK LQVLJKWLQWRWKHOLYHVRIWKHGDQFHSHUIRUPHUV 7KHGDQFHUV·FRPPHQWVDQGDWWLWXGHVQRWRQO\UHIOHFWW KHSHUFHSWLRQRIDXWKHQWLFLW\LQHWKQLF FRPPXQLWLHVEXWDOVRVKHGVRPHOLJKWRQSUREOHPVDQGSURVSHFWVRIFXOWXUDOWRXULVPGHYHORSPHQW LQ+DLQDQ7KLVFKDSWHUILUVWLQWURGXFHWKHSURILOHVRIWKHGDQFHSHUIRUPHUVDQGWKHFKDUDFWHULVWLFV RI GDQFH SHUIRUPDQFH LQ IRON YLOODJHV ,W WKHQ HYDOXDWHV DXWKHQWLFLW\ IURP WKH GDQFH SHUIRUPHUV·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ducation 40 Percentage Dance Performers 30 Tourism Employees 20 10 0 College Senior High Junior High Primary School School School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·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´DXWKHQWLFµRU´JHQXLQHµRXWVLGHRIWKHWRXULVPVHWWLQJ7KHUHIRUHLQDGDQFHSHUIRUPDQFHRQHRI WKHILUVWLVVXHVWREHFRQVLGHUHGLVZKDWLVD´QRQ FRPPHUFLDOµGDQFH)RUDQHWKQLFGDQFH´QRQ FRPPHUFLDOµ UHYROYHV JHQH UDOO\ DURXQG DQRQ\PRXV DXWKRUVKLS DQG VNLOO RU DFFXUDF\ LQ WKH UHSOLFDWLRQ RI VRPHWKLQJ XVHG IXQFWLRQDOO\ E\ PHPEHUV RI D JLYHQ VRFLHW\ 'DQLHO 1RQ FRPPHUFLDOL]DWLRQUHODWHVDOVRWRWKHXVHRIIXQFWLRQDOLWHPVIURPRQHVRFLHW\ZKLFKDUHYLHZHGDV RUQDPHQWDWLRQ HQWHUWDLQPHQW RU FRQWHPSODWLRQ E\ PHPEHUV RI DQRWKHU VRFLHW\ &RKHQ 1RQFRPPHUFLDOL]DWLRQLQFOXGHVDVHQVHRIERXQGDU\DPRQJGLIIHULQJVHWVRIFRQYHQWLRQVUXOHVRU UHJXODWLRQV .DVILU +DQGOHUDQG6D[WRQ S DUJ XHGWKDWWKHUHDUHWZRNLQGVRI´QRQ FRPPHUFLDOµWKH RQHDSSOLHGWRYLVXDODUWVLVJHQHUDOO\DQH[WHUQDOMXGJHPHQWE\WKHVSHFWDWRUDQGWKHRQHDSSOLHGWR SHUIRUPLQJDUWVDQGWKHLUFDVHRI´OLYLQJKLVWRU\µLVDQ´H[SHULHQWLDOµDXWKHQWLFLW\,QWKHYLVXDO DUWV DXWKHQWLFLW\LVPRVWRIWHQEDVHGXSRQFROOHFWRUV·WDVWHVDQGFROOHFWRUV·QDPLQJDQGFDWHJRUL]DWLRQRI JHQUHV DQG VW\OHV .DVILU S )RU H[DPSOH WKH :HVWHUQ EDOOHW FDQ EH YLHZHG LQ LWV WRXULVPDUWGLPHQVLRQ 'DQLHO $OWKRXJKE DOOHWLVQRWFRPPRQO\UHJDUGHGDVWRXULVPDUWLWLV DFWXDOO\D(XURSHDQ$PHULFDQFXOWXUDO RUHWKQLF GDQFHIRUPDQGDVVXFKLWKDVRIWHQEHHQVWDJHG SUHSDUHG DQG SDFNDJHG WR IUDPH (XURSHDQ $PHULFDQ FXOWXUHV ([SHULHQWLDO DXWKHQWLFLW\ LV FRQFHUQHGZLWK´SHUIHFWVLPXODWLRQµUHSOLFDWLRQRIDSDVWDQLVRPRUSKLVPRUVLPLODULW\RIVWUXFWXUDO 158 IRUP´EHWZHHQDOLYLQJKLVWRU\DFWLYLW\RUHYHQWDQGWKDWSLHFHRIWKHSDVWLWLVPHDQWWRUH FUHDWHµ +DQGOHUDQG6D[WRQS $XWKHQWLFLW\SUHYDLOVZKHQ WKHLQGLYLGXDOLVDIIHFWHGRUWRXFKHG VRWKDWKHIHHOVWKDWWKH´UHDOµZRUOGDQGWKH´UHDOµVHOIDUHFRQVRQDQW +DQGOHUDQG6D[WRQS 7RXULVWLFGDQFHSHUIRUPDQFHUXQVSDUDOOHOWROLYLQJKLVWRU\SURMHFWVLQWKDWLWUHOLHVKHDYLO\RQ WKHGHVLUHIRU´QRQFRPPHUFLDOµH[SHULHQFHVRIWKHSHUIRUPHUWRVDWLVI\WKHWRXULVW·VGHVLUHIRU´WKH DXWKHQWLFµ 'DQLHO )URP WKH SHUIRUPLQJ FRPPXQLW\·V SRLQW RI YLHZ QRQ FRPPHUFLDO GDQFH IRUPV DUH GLIIHUHQWLDWHGIURPRQHDQRWKHUE\PHDQVRIVW\OHW\SHDQ GFRQWH[WDQGXQWLOWKHDSSHDUDQFHRI WRXULVPWKHPL[LQJRIIRUPVKDVJHQHUDOO\EHHQMXGJHGDVDYLRODWLRQRIWKHERXQGDULHVEHWZHHQ IRUPV &RPELQDWLRQV RI GDQFH VWHSV IURP GLIIHUHQW WUDGLWLRQV WKDW LV LQWHU WUDGLWLRQDO PL[WXUHV KDYHEHHQMXGJHGDV´IDNHVµ´IUDXGVµ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´JRRGRPHQµDQGFDQGULYHDZD\HYLO 6X HWDO +RZHYHU VLQFH WKH EDPERR EHDWLQJ GDQFH KDV EHHQ WXUQHG LQWR D WRXULVWLF GDQFH WKH LPSRUWDQFHRIFRORXUVHOHFWLRQR IEDPERRKDVGLVDSSHDUHG7KHUHOLJLRXVPHDQLQJRIWKHEDPERR FRORXU KDV DOVR EHHQ IRUJRWWHQ ,QVWHDG WKH GDQFH HPSKDVLVHV WKH EDPERR EHDWLQJ UK\WKPV LQWLPDWHWHDPSOD\LQJDQGVPLOLQJIDFHV7KH´QHZµ UHVWUXFWXUHGRUUHLQWHUSUHWHG IRUPDQGVW\OH KDYHHPHUJHGDV´DXWKHQWLFµIRUWKH/LFRPPXQLW\)XUWKHUWKH´HYROYHGµEDPERR EHDWLQJGDQFH KDVEHFRPHDQLPSRUWDQWSDUWRI/LFXOWXUDOLGHQWLW\DQGLVKHOGLQKLJKHVWHHPE\PDQ\WRXULVWV /L GDQFH SURJUDPV KDYH JRQH WKURXJK D VHULHV RI HYROXWLRQV ,Q RUGHU WR ILW WRXULVWV·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´FXOWXUDOµ UDWKHUWKDQ´UHOLJLRXVµ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´PLVKDSVµ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´QRQFRPPHUFLDOL]DWLRQµ DQG ´UHLQYHQWLRQµ RI GDQFH SHUIRUPDQFH IRU WRXULVWV $V D UHVXOW , VXJJHVWWKDWWKHGHILQLWLRQVRI´QRQ FRPPHUFLDOL]DWLRQµDQG´FRPPRGLILFDWLRQµDUHUHODWLYHWHUPV DQGDUHMXGJHGE\ERWKSHUIRUPHUVDQGWRXULVWV 'DQFH3HUIRUPHUV 7KH GDQFH SHUIRUPHUV DUH VHHQ DV WKH FULWLFDO LQGLFDWRU RI DXWKHQWLFLW\ :KDW KDSSHQV WR WKH SHUIRUPHU LQ WKH SURFHVV RU DV D UHVXOW RI D SHUIRUPDQFH LV RIWHQ GHHPHG FULWLFDO LQGHWHUPLQLQJ ´QRQFRPPHUFLDOL]DWLRQµ ,Q IDFW ERWK ZLWKLQ RU RXWVLGH RI WKH WRXULVP VHWWLQJ QRQ FRPPHUFLDOL]DWLRQWKDWLVORFDWHGZLWKLQWKHSHUIRUPHU·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´JHWWLQJDORQJZLWKWKHWHDPµKDVEHHQ WKH PRVW LPSRUWDQW VHOHFWLRQ IDF WRU 7KH YLOODJH GLUHFWRUV KDYH SDLG PRUH DWWHQWLRQ GXULQJ UHFUXLWPHQWWRGDQFHUV·DSWLWXGHIRUOHDUQLQJSK\VLFDODSSHDUDQFHDQGSHUVRQDOLW\6RPHGLUHFWRUV HYHQLQVLVWHGWKDWSHUIRUPHUVIURPPDLQODQG&KLQDZRUNEHWWHUWKDQ/LSHUIRUPHUVEHFDXVHWKRVH 162 IURPWKHPDLQODQGDUH´VPDUWHUµWKDQWKRVHIURPWKHPLQRULW\)RUH[DPSOHWKHGLUHFWRURI6DQ\D /L(WKQLF)RON9LOODJHVFRPPHQWHGWKDW :KHQZHKLUHWKHHWKQLFGDQFHSHUIRUPHUVWKHILUVWWKLQJZHFRQVLGHULVWKHDSWLWXGHIRUOHDUQLQJWRGDQFH,Q JHQHUDOWKH/LKDYHNQRZQWKHHWKQLFGDQFHGXULQJFKLOGKRRGWKHUHIRUHLWLVPXFKHDVLHUIRU\RXQJ/LJLUOVWR OHDUQWKHVHGDQFHSURJUDPV+RZHYHU,KDYHWRWHOO\RXWZRWKLQJVILUVWWKHGDQFHSURJUDPVZHSUHVHQWDUH QRWWRWDOO\HWKQLF/LGDQFHWKH\KDYHEHHQPRGLILHGWRILWWRXULVWV·WDVWHVDQGWLPHVFKHGXOHV6HFRQGVRPH GDQFHUVIURPPDLQODQG&KLQDGRDEHWWHUMREWKDQHWKQLFGDQFHUVKHUH7KH\DUHVPDUWHUWKDQWKHRUGLQDU\ /L7KXVHWKQLFLW\LVDQLPSRUWDQWFULWHULRQZKHQFKRRVLQJWKHGDQFHSHUIRUPHUVKRZHYHULWLVQRWDPXVW 7KH GDQFHUV JHQHUDOO\ GR QRW KDYH SULRU SURIHVVLRQDO WUDLQLQJ 7KH GDQFHUV·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´FUDVK FRXUVHµ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´DXWKHQWLFµ IURP D JRYHUQPHQWDOSHUVSHFWLYHLWLVQRWZLGHO\YLHZHGDV´DXWKHQWLFµE\WKHGDQFHSHUIRUPHUV$VQRWHG LQ WKH FRPPHQW PDQ\ WHDFKHUV DUH RI +DQ RULJLQ DQG WKH GDQFLQJ VFKRROV DUH UXQ E\ WKH JRYHUQPHQWWKDWKDVSURPRWHGWKHLQVWLWXWLRQDOL]DWLRQRI/LGDQFLQJDQGVLQJLQJ/LSHRSOHOHDUQ QHZURXWLQHVDWDJRYHUQPHQWDUWVVFKRROLQFOXGLQJ/LSRHWLFVRQJVP\WK VRUZD\RIOLIH7KXV VXFK GDQFH WUDLQLQJ ZDV UHJDUGHG DV HQFRXUDJLQJ ´PDQXIDFWXUHGµ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´DXWRQRPRXV UHJL RQVµ LQ ZKLFK WKH PDMRULW\ RI WKH SRSXODWLRQ EHORQJV WR WKH HWKQLF PLQRULW\ +RZHYHUWKHVWDWH·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´URRWµ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·VKRXVHLVQH[WWRWKHHPSOR\HHV· 6LQFHURRPDQGERDUG ZHUHFRYHUHGE\WKHYLOODJHGDQFHSHUIRUPHUVDSSHDUHGWRKDYHPRUH GLVSRVDEOHLQFRPHWKDQPDQ\RWKHUSHRSOH2YHURILQWHUYLHZHHVFODLPHGWKDWWKH\VSHQWWKH LQFRPHORFDOO\ZLWKOLWWOHVDYLQJ0RVWPDOHGDQFHSHUIRUPHUVFRPSODLQHGRIKLJKH[SHQGLWXU HV HJ EX\LQJFLJDUHWWHVDQGOLTXRU RILQWHUYLHZHHVVWDWHGWKDWWKH\VDYHPRQH\IRUWKHIXWXUHDQG RIWKHPQRWRQO\VDYHPRQH\EXWDOVRUHPLWPRQH\KRPH3HUIRUPHUVZKRUHPLWPRQH\ZHUH PDUULHGIHPDOHVDQGWKH\GLGWKLVWRVXSSRUWWKHLUFKL OGUHQ·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´VXFFHVVµ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·DJUHHPHQWDOVRP\ IDPLO\ZDVUHTXLUHGWRREWDLQDJUHHPHQWIURPWKHHQWLUHFODQLQWKHYLOODJH&RQVHQVXVZDVQRWDOZD\VHDV\WR UHDFKEHFDXVHVRPHYLOODJHKHDGVZHUHFRQFHUQHGE\WKHFKDQJHV²WKH\IHOW,ZRXOGEHLQDGDQJHURXVSRVLWLRQ LQWKHRXWVLGHZRUOG+RZHYHUODVW\HDUZKHQ,UHWXUQHGWRP\YLOODJH,ERXJKWDORWRIJLIWVDQGEURXJKW VRPHPRQH\IRUP\IDPLO\DQGUHODWLYHV7KH\FDPHWRUHDOL]HWKDWLWZDVDZLVHLGHDWRVHQGPHRXWRIWKH YLOODJH ,Q +DLQDQ /L FRPPXQLWLHV WKH LPPHGLDWH HIIHFWV RI HFRQRPLF DQG WHFKQRORJLFDO SURJUHVV RQ WUDGLWLRQDOVRFLHW\DUHHYLGHQW6\VWHPVZKLFKZHUHDEOHWRSUHYDLOLQDUXU DOHQYLURQPHQWZKHUH FRPPXQLWLHVZHUHUHVWULFWHGLQVL]HDQGZKHUHVRFLDOXQLWVZHUHZHOOLQWHJUDWHGDQGGRPLQDWHGE\ GLUHFW SHUVRQDO UHODWLRQVKLSV DUH JLYLQJ DZD\ WR QHZ VRFLDO DQG FXOWXUDO V\VWHPV LQKHUHQW LQ PRGHUQL]DWLRQDQGXUEDQL]DWLRQ7RXULVPGH YHORSPHQWLQHWKQLFFRPPXQLWLHVKDVEHHQYLHZHGDV LPSRVLQJDVWUDLQRQWUDGLWLRQDOVWUXFWXUHVVSHFLILFFXOWXUDOWUDLWVDUHHURGHGDQGUHODWLRQVEHWZHHQ LQGLYLGXDOVDUHEURDGHQHGDQGEHFRPHPRUHLQGLUHFW 6WDWHUHJXODWLRQKDVHQFRXUDJHGWRXULVPLQYROYHPH QWE\WKH/LPLQRULW\LQSDUWLFXODUWKH \RXQJ/LJLYHQWKDWWKHXQHPSOR\PHQWUDWHLVYHU\KLJK DURXQGEDVHGRQXQRIILFLDOGDWD $W SUHVHQWHWKQLFDXWRQRP\KDVQRWIRUPHGDWKUHDWWRWKH6WDWH,QIDFWWKHJRYHUQPHQWKRSHVWR UHGXFHILQDQFLDOEXUGHQVWKURXJKWKHGHYHORSPHQWRIWRXULVP7RXULVPLVWKXVZLGHO\YLHZHGDVD MREDQGUHYHQXHJHQHUDWRU+RZHYHUWKHMRESURVSHFWVIRUWKH/LPLQRULW\VHHPWREHGLP,Q 169 JHQHUDOWKH/LKDYHOLWWOHHGXFDWLRQDQGWKHLUPRVWFRPPRQRFFXSDWLRQVLQWKHKR VSLWDOLW\VHFWRU DSSHDUWREHPHQLDOVXFKDVURRPFOHDQHUVDQGNLWFKHQKHOSHUV0DQ\\RXQJ/LSHRSOHKDYHTXLW MREVGXHWRKLJKZRUNORDGVDQGGLVFULPLQDWLRQ:RUNLQIRONYLOODJHVLVVHHQDVWKHPRVWZHOFRPLQJ RFFXSDWLRQ2QH/LGDQFHSHUIRUPHULQ%DRW LQJ$UHFD0DQRUGHVFULEHGWKHIHHOLQJVDVIROORZV ,ZRUNHGDFRXSOHRI\HDUVLQWKHKRWHOUHVWDXUDQWDVDZDLWUHVV,WZDVDUHVWDXUDQWWKHPHGLQHWKQLF/LIRRG DQGZHZHUHVXSSRVHGWRGUHVVLQ/LFRVWXPHV+RZHYHU,ZDVQRWKDSS\QRWRQO\EHFDXVHWKHZRUNORDGZDV YHU\KLJKEXWDOVRWKH\>QRQ/LPDQDJHUV@WHDVHGDQGMRNHGDERXWRXUSUHVHQWDWLRQ0\IHHOLQJLVPXFK EHWWHUKHUH>IRONYLOODJH@EHLQJDGDQFHSHUIRUPHU(YHQWKRXJKWKHZRUNORDGLVWKHVDPHRUVRPHWLPHVKLJKHU ,IHHOSOHDVHGWRVKRZFDVHRXUFXOWXUHDQGZRUNLQWKHHWKQLF/LFRQWH[W $FFRUGLQJWR6ZDLQ WKHIXQGDPHQWDOFKDOOHQJHVWRVXVWDLQDEOHHWKQLFWRXULVPDUHZKHWKHU VXIILFLHQWDXWRQRP\LVH[HUFLVHGE\WKHHWKQLFPLQRULW\JURXSKRZWKHLUFXOWXUHLVPDUNHWHGZKDW VRFLRFXOWXUDOUHVSRQVHVIURPWKHHWKQLFPLQRULW\JURXSDUHH[SUHVVHGWRZDUGWRXULVPDQGZKDWWKH SURVSHFWVDUHIRUIXWXUHGHYHORSPHQW7KHHVWDEOLVKPHQWRIIRONYLOODJHVSURYLGHVDVHQVHRIHWKQLF DXWRQRP\IRUWKH/LPLQRULW\7KH\UHDOL]HWKDW/LFXOWXUHVKDYHEHHQ PDUNHWHGWRWKHRXWVLGHZLWK KLJK YDOXHV 6RPH GDQFH SHUIRUPHUV EHOLHYH WKDW DV ORQJ DV WKH\ ´VWD\ HWKQLFµ WKH\ FDQ EHQHILW PRUHIURPHFRQRPLFLPSURYHPHQWDQGLQFHQWLYHVIURPWKHJRYHUQPHQW7KHUHJLRQDOJRYHUQPHQW ZDVDSSURDFKLQJWRXULVPZLWKUHDOLVWLF RSWLPLVP ²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·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o you feel satisfied 80 with your current job? 70 60 Do you plan to 50 continue work in this 40 village? 30 Do you feel you can "Yes" Percentage 20 get more job training? 10 0 Sanya HainanBaotingTianniu Tianya Tongzha Luhuitou Indonesia Folk Villages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·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² WR SRUWUD\ HWKQLFLW\ ZLWK FRPPRGLILFDWLRQ &RQVHTXHQWO\PDVVWRXULVPLVUHJDUGHGDVWKHSUHIHUUHGGHY HORSPHQWWRHQVXUHHFRQRPLFSURVSHULW\ LQWKHYLOODJHDQGWKHOHYHORIMREVDWLVIDFWLRQLVDVVRFLDWHGZLWKMREVHFXULW\ 7KXVWKH/LPLQRULW\KDVDXWKHQWLFDWHGLWVFXOWXUDOUHVRXUFHVLQWKHFRQWH[WRI+DLQDQIRON YLOODJHV 7KH UHVHDUFK VXJJHVWHG WKDW FRPPRGLILFDWLRQ RI WKH /L FXOWXUH LV XVHG DV D SRVLWLYH PHFKDQLVPLQWKHSXUVXLWRIVXVWDLQDEOHGHYHORSPHQWEHFDXVHWKHIRUPHULVLQVHSDUDEOHIURPWKH YLOODJH·V GHYHORSPHQW SURFHVV 7KH SUDFWLFH VR IDU KDV GHPRQVWUDWHG WKDW WKLV SURFHVV LV XVHG WR GHWHUPLQH WKH QDWXUH RI FXOWXUDO SURGXFWV DQG WKH FRQWURO RI DFFHVV WRWKHPIRUFRQVXPSWLRQE\ WRXULVWV $SSURSULDWH FRPPRGLILFDWLRQ ZLOO VWUHQJWKHQ WKH YLOODJH·V FRPSHWLWLYHQHVV YLWDO IRU LWV VXUYLYDO(IIRUWVPXVWEHPDGHWRPDLQWDLQHWKQLFFXOWXUDOLQWHJU LW\LQWKHYLOODJHDVFXOWXUDOWRXULVP PD\ ´WXUQ H[RWLF FXOWXUHV LQWR FRPPRGLWLHV DQG LQGLYLGXDOV LQWR DPXVLQJ ¶REMHFWV· IRU WRXULVWV· FRQVXPSWLRQµ .OLHJHU S ,W LV SRVVLEOH WKDW QRYHO HQFRXQWHUV ZLOO JUDGXDOO\ EHFRPH URXWLQHIRUERWKWRXULVWVDQGKRVWVDQGFXOWXUDOSUHVHQWDWLRQVPD\EHFRPHPRUHDQGPRUHUHPRYHG IURPWKHUHDOLW\RIHYHU\GD\OLIH7KHUHIRUHWKHWHPSWDWLRQWR´IUHH]Hµ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·V ZRU N WR H[DPLQH WKH LVVXH RI DXWKHQWLILFDWLRQ 7KHVH FRQVWUXFWV DUH QRQ FRPPHUFLDOLVDWLRQ YHUVXV FRPPRGLILFDWLRQFXOWXUDOHYROXWLRQYHUVXVPXVHXPLILFDWLRQHFRQRPLFGHYHORSPHQWYHUVXVFXOWXUDO SUHVHUYDWLRQ HWKQLF DXWRQRP\ YHUVXV VWDWH UHJXODWLRQ DQG PDVV WRXULVP GHYHORSPHQW YHUVXV VXVWDLQDEOHFXOWXUDOWRXULVP7KHSUHYLRXVFKDSWHUVGHPRQVWUDWHGWKDWWHQVLRQH[LVWVERWKZLWKLQ DQG EHWZHHQ HDFK RI WKHVH FRQVWUXFWV 7KH YDULRXV VWDNHKROGHUV KROG GLIIHUHQW SRVLWLRQV ZLWK UHVSHFWWRWKHYDULRXVSDUDGR[HVD QGWHQVLRQVH[LVWEHWZHHQWKHLUSROHV7KHVHGLIIHUHQFHVPHULW FRPSDULVRQWRXQGHUVWDQGIXOO\WKHSURFHVVRIDXWKHQWLILFDWLRQLQ+DLQDQ ,W LV VXJJHVWHG WKDW WKH ILYH \DUGVWLFNV FDQ EH YLHZHG DV RYHUODSSLQJ DQG LQWHUDFWLQJ DV VKRZQLQ)LJXUH7KHFRQYHUJHQFHSRLQWFDQEHVHHQDVDQHXWUDOSRVLWLRQIRUHDFKRIWKHILYH 175 FRQVWUXFWV )LJXUH LOOXVWUDWHV D VLWXDWLRQ LQ ZKLFK RQH VWDNHKROGHU LV ORFDWHG LQ D PHGLXP SRVLWLRQRQHDFKRIWKHILYH\DUGVWLFNV2QHSRVLWLRQLVQRWWREHUHJDUGHGDVQHFHVVDUL O\VXSHULRURU LQIHULRU WR DQ\ RWKHU 5DWKHU DQ\ SRVLWLRQ ZLOO UHIOHFW WKH JRDOV DQG REMHFWLYHV RI WKRVH EHLQJ HYDOXDWHGDQGWKXVLVOLNHO\WRYDU\EHWZHHQVWDNHKROGHUV5HVHDUFKLQ+DLQDQIRONYLOODJHVLQGLFDWHV WKDWGXULQJWKHSURFHVVRIDXWKHQWLILF DWLRQWKHIRXUVWDNHKROGHUVH[KLELWHGGLIIHUHQWSRVLWLRQVRQWKH ILYHFRQVWUXFWV)RUH[DPSOHWKHQDWLRQDOJRYHUQPHQWSD\VPRUHDWWHQWLRQWRVWDWHUHJXODWLRQWR FXUEHWKQLFDXWRQRP\ZKLOHWRXULVPEXVLQHVVHVDUHPRUHLQWHUHVWHGLQHFRQRPLFGHYHORSPHQWW KDQ FXOWXUDOSUHVHUYDWLRQ9LVLWRUVKDYHQRRSLQLRQVDERXWWKHHWKQLFSUHVHQWDWLRQDQGWKHLUH[SHULHQFHV LQ WKH IRON YLOODJHV DUH VXSHUILFLDO 'DQFH SHUIRUPHUV DUH DWWUDFWHG E\ EHWWHU SD\ DQG FXOWXUDO SUHVHUYDWLRQ GRHV QRW VHHP WR EH DQ LPSRUWDQW LVVXH 7KXV WKH IRXU VWDNHKROGHUV H[KLELW IRXU GLIIHULQJSDWWHUQVZKHQDXWKHQWLFDWLQJHWKQLFFXOWXUH 7KHREMHFWLYHRIWKLVFKDSWHULVWRVXPPDUL]HDQGFRPSDUHWKHSRVLWLRQVRIVWDNHKROGHUVRQ HDFK RI WKH ILYH FRQVWUXFWV 7KLV FRPSDULVRQ LV DLGHG E\ WKH XVH RI GLDJUDPV 7KH WKHVLV KDV DGRSWHGERWKTXDQWLWDWLYHDQGTXDOLWDWLYHPHWKRGV)RUH[DPSOHUHVXOWVRIVXUYH\VZLWKYLVLWRUVDUH UHSRUWHGXVLQJQXPEHUVSHUFHQWDJHVDQGVWDWLVWLFDOWHVWV2QWKHRWKHUKDQGRWKHUPDWHULDOVDUH SUHVHQWHGLQDPRUHTXDOLW DWLYHIDVKLRQHJTXRWDWLRQVIURPGLVFXVVLRQVZLWKGDQFHUV7KHGLDJUDPV GR QRW SRUWUD\ TXDQWLWDWLYH PHDVXUHV EXW DUH WKH UHVXOWV RI D TXDOLWDWLYH DVVHVVPHQW UHIOHFWLQJ MXGJHPHQWVEDVHGXSRQWKHHPSLULFDOUHVHDUFKSUHVHQWHGLQWKHSUHFHGLQJFKDSWHUV $WWKHULVNRI RYHUVLPSOLILFDWLRQWKHVHGLDJUDPVFRQVWLWXWHDUHODWLYHO\FOHDUZD\WRSUHVHQWWKHSRVLWLRQRIHDFK VWDNHKROGHU JURXS ZLWK UHVSHFW WR WKH DWWULEXWHV RI DXWKHQWLILFDWLRQ )XUWKHU WKH GLDJUDPV DUH VXSSOHPHQWHGE\DVXPPDU\WDEOH 7DEOH ZKLFKSURYLGHVMXVWLILFDWLRQIRUWKHSODFHPHQWVRQWKH GLDJUDPV ,Q HDFK RI WKH VWDNHKROGHU GLDJUDPV WKH SRVLWLRQ RI D VSHFLILF VWDNHKROGHU JURXS LV LQGLFDWHG IRU HDFK FRQVWUXFW E\ D VPDOO GDUN FLUFOH 2I FRXUVH LW PXVW EH DFNQRZOHGJHG WKDW VWDNHKROGHU JURXSV DUH QRW KRPRJHQRXV DQG WKDW LQ UHDOLW\ WKHUH PD\ EH FRQVLGHUDEOH GHYLDWLRQ 176 DERXWWKHVHSRLQWV7KHHPSKDVLVKHUHLVWKHUHODWLYHSRVLWLRQRQHDFKFRQVWUXFWUDWKHUWKDQWKH SUHFLVHPHDVXUHPHQWRIWKHSRVLWLRQ)RUH[DPSOHWKHSHUVSHFWLYHVRI QDWLRQDOJRYHUQPHQWVPD\ GLIIHUIURPWKRVHRIORFDOJRYHUQPHQWV)XUWKHUPRUHQRWDOOFRQVWUXFWVDUHRIHTXDOLPSRUWDQFHWR DOO VWDNHKROGHUV 7KXV WKH GLPHQVLRQ RI JUHDWHVW LPSRUWDQFH WR HDFK JURXS LV JLYHQ JUHDWHU SURPLQHQFH LQ WKHLU GLDJUDP WKURXJK SR UWUD\DO E\ D KHDYLHU OLQH 7KXV IRU H[DPSOH HWKQLF DXWRQRP\LVLQGLFDWHGLQDQH[WUHPHSRVLWLRQLQ)LJXUHEHFDXVHPRVWPLQRULW\SHRSOHVXSSRUW WKLVSRVLWLRQDQGGHVLUHJUHDWHUFRPPXQLW\FRQWURORYHUWRXULVPDFWLYLWLHV+RZHYHULWLVQRWWKH VWURQJHVW SRVLWLRQ WKDW ZKLFK WKH\ KROG $OWKRXJK WKHLU FXOWXUH LV LPSRUWDQW WR WKHPWKH\SODFH JUHDWVWUHVVRQHQKDQFHPHQWRIHFRQRPLFRSSRUWXQLWLHVDQGDUHSUHSDUHGWRFRPSURPLVHFXOWXUDO DWWULEXWHVIRUWKHEHQILWVRIHFRQRPLFGHYHORSPHQW7KDWLVZK\WKLV GLPHQVLRQLVLQGLFDWHGE\D KHDYLHUOLQH )LJXUH$6WDWHRI(TXLOLEULXP Economic Development Ethnic Autonomy Cultural Evolution Mass Tourism Development Non-commercialization Commodification Sustainable Cultural Tourism Museumification State Regulation Cultural Preservation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·V5HSXEOLF &RQQHU 1DWLRQDOXQLW\LVWKHPDMRUJXLGHOLQHZKHQGHYHORSLQJHWKQLFWRXULVP&RQWUROLV DQLPSRUWDQWLVVXHLQWKHSUHVHQWDWLRQRIHWKQLFFXOWXUH1DWLRQDOJRYHUQPHQWSOD\VDGRXEOHUROHLQ DXWKHQWLFDWLQJWKHHWKQLFFXOWXUDOUHVRXUFHV2QWKHRQHKDQGLWVXSSRUWVWKHFXOWXUDOGLVWLQFWLYHQHVV IRUHFRQRPLFGHYHORSPHQWSDUWLFXODUO\WRXULVPGHYHORSPHQWRQ WKHRWKHUKDQGLWVXSSUHVVHVDQ\ ´WUXHµ DXWRQRPRXV ULJKWV ,Q WHUPV RI FRPPRGLILFDWLRQ WKH QDWLRQDO JRYHUQPHQW VWDQGDUGL]HV HWKQLFPDUNHUVWRILOODV\PEROLFDQGFRPPHUFLDOQLFKHIRUSXEOLFJD]H(WKQLFDWWUDFWLRQVVXFKDV IRON YLOODJHV KDYH EHHQ FRP PRGLILHG ZLWK WKH VXSSRUW RI VWDWH SROLFLHV ,Q WHUPV RI FXOWXUDO HYROXWLRQWKHSROLFLHVIRUVWDWHJRYHUQPHQWVHHNWR´IRVVLOL]HµFHUWDLQDVSHFWVRIFXOWXUDOWUDGLWLRQ GUDZLQJGLVWLQFWERXQGDULHVDURXQGORFDOFXVWRPVIL[LQJWKHPLQWLPHDQGVSDFHDQG HQVXULQJWKH\ UHPDLQHQFDVHGDVH[KLELWVIRUWKHPRGHUQWRXULVWVWRREVHUYHDQGDSSUHFLDWH6WDWHSROLFLHVDOVR HQFRXUDJHWKH/LWREHPRUH´GHYHORSHGµDQG´PRGHUQL]HGµ7KHGLUHFWLRQRIHYROXWLRQFDQEH VHHQDVDSURFHVVRI´+DQLILFDWLRQµLQZKLFKWKH/ LPLQRULW\LVVXEVXPHGLQWRWKH+DQPDMRULW\ 1DWLRQDOJRYHUQPHQWSODFHVJUHDWZHLJKWRQMREFUHDWLRQDQGFXOWXUDOWRXULVPLVYLHZHGDVRQHRI WKHEHVWZD\VWRPLQLPL]HWKHKLJKXQHPSOR\PHQWUDWHLQHWKQLFFRPPXQLWLHV(FRQRPLFIXQFWLRQV 178 KDYH EHHQ JLYHQ SURPLQHQFH DQG FXOWXUDO SUHVHUYDWLRQ KDV QRW JDLQHG PXFK DWWHQWLRQ IURP WKH QDWLRQDOJRYHUQPHQW)LQDOO\WKHPHDQLQJRI´VXVWDLQDELOLW\µDSSHDUVWREHYHU\GLIIHUHQWIURPZKDW LVNQRZQLQWKHGHYHORSHGFRXQWULHVZKHUHVRFLDO FXOWXUDODQGHQYLURQPHQWDOLV VXHVKDYHEHHQJLYHQ JUHDWHUSULRULW\6XVWDLQDEOHWRXULVPGHYHORSPHQWLVDNLQGRI´ZLQGRZ GUHVVLQJµDQGSROLFLHVRI HQYLURQPHQWDOSURWHFWLRQVWLOOODJEHKLQGWKRVHLQWKH:HVW +DLQDQ GLG QRW EHFRPH D SURYLQFH XQWLO ZKHQ WKH QDWLRQDO JRYHUQPHQW PDGH LW D 6SHFLDO(FRQRPLF=RQH7KHUHIRUHWKHQHZSURYLQFLDOJRYHUQPHQWKDVIRFXVHGXSRQHFRQRPLF GHYHORSPHQW7RXULVPLVLGHQWLILHGDV+DLQDQ·VOHDGLQJVHFWRU+DLQDQ·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·SHUVSHFWLYH +DLQDQZDVXQGHUWKHWLJKWFRQWURORI*XDQJGRQJSURYLQFHEHIRUHDQGVHUYHGDVDPLOLWDU\ EDVHWRFRQWDLQ6RXWKHDVW$VLDQFRXQWULHV$JULFXOWXU HZDVHVVHQWLDOO\WKHRQO\VRXUFHRILQFRPHIRU /L FRPPXQLWLHV 7RXULVP LV D QRYHO LGHD IRU WKH ORFDO JRYHUQPHQW DQG WKH LPSDFWV RQ WKH FRPPXQLWLHVKDYH\HWWREHDSSUHFLDWHG7KHSULPDU\FULWHULRQRIFXOWXUDODXWKHQWLFLW\IURPDORFDO JRYHUQPHQW·V SHUVSHFWLYH OLHV LQ WKH GLVWDQFH IURP WKH ORFDWLRQDO FRUH RI WKH HWKQLF FRPPXQLW\ 0DQ\RIILFLDOVKDYHRYHUORRNHGWKDWWKHGHOLYHU\RIDWRXULVPSURGXFWLQFOXGHVDVHWRIVHUYLFHVDQG 179 LVQRWVLPSO\DQDWWUDFWLRQRUDFFRPPRGDWLRQ 0DWKLHVRQDQG:DOO /L FRPPXQLWLHVVWULYHWR UHGHILQH WKHLU FXOWXUDO LGHQWLWLHV WKURXJK WRXULVP GHYHORSPHQW (FRQRPLF GHYHORSPHQW PD\ JUDGXDOO\HURGHWKHFXOWXUDOSUHVHUYDWLRQDQGORFDOJRYHUQPHQWSOD\VDSDVVLYHUROHWRILQGDEDODQFH EHWZHHQSRZHUSROLF\DQGSODFH )LJXUHVKRZVDJHQHUDOSDWWHUQIURPWKHJRYHUQPHQWV·SHUVSHFWLYH*RYHUQPHQWVSODFH KLJK HPSKDVLV RQ VWDWH UHJXODWLRQ WR SUHYHQW ´WUXHµ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´WUDGLWLRQDOµGDQFHSHUIRUPDQFHVKDYHEHFRPH´PDQXIDFWXUHGµURXWLQHV 180 )LJXUH SUHVHQWV WKH PDLQ SDWWHUQ IURP D WRXULVP EXVLQHVV· SHUVSHFWLYH $OWKRXJK WRXULVPEXVLQHVVHVSOD\DNH\UROHLQEDODQFLQJFXOWXUDOSUHVHUYDWLRQDQGHFRQRPLFGHYHORSPHQWWKH ODWWHUDSSHDUVWREHWKHPRVWLPSRUWDQWZKLOHFXOWXUDOSUHVHUYDWLRQLVWUHDWHGDVDIRUPRIWRNHQLVP 7KHPDQDJHPHQWRIWKHIRONYLOODJHVLQVLVWVRQ´OLYHQLQJWKLQJVXSµVR WKDWWKHYLVLWRUVZLOOQRWJHW ERUHG&RQVHTXHQWO\WKHPDQDJHUVKDYHGHFLGHGWRUHGXFHWKHORQJWUDGLWLRQDOGDQFHSHUIRUPDQFH WR D WRNHQ PLQXWHV RU VR DQG WR SUHVHQW D YLVLWRU SDUWLFLSDWLRQ SURJUDP DW WKH HQG 9LOODJH PDQDJHUVRIWHQIDLOWRVHHWKH VLJQLILFDQFHRIWKHSURIRXQGFXOWXUDOGLIIHUHQFHVWKDWH[LVWLQHWKQLF FXOWXUHV,QVWHDGIRONYLOODJHVEHFRPHDFRPELQDWLRQRIHWKQLFSUHVHQWDWLRQVDQGVDOHVRXWOHWVIURP WKH QXPHURXV YHQGRU VWDQGV (WKQLF SUHVHQWDWLRQ LV LQ D VWDWH RI ´PXVHXPLILFDWLRQµ SRUWUD\LQJ WUDGLWLRQDO DVSHFWV RI /L FXOWXUH DV DQFLHQW H[RWLF DQG IRVVLOL]HG 7RXULVP EXVLQHVVHV SD\ PRUH DWWHQWLRQ WR PHHWLQJ WKH H[SHFWDWLRQ RI WRXULVWV DQG SUHVHQW VHOHFWHG DVSHFWV RI /L FXOWXUH LQ DQ HQWHUWDLQLQJ ZD\ 0HDQZKLOH WKH HIIHFW RI VWD WH UHJXODWLRQ RQ YLOODJHEXVLQHVVLVPRGHUDWH7KH RSHUDWLRQRIIRONYLOODJHVKDVEHHQYLHZHGDVDJUDVVURRWVSKHQRPHQRQDQGHWKQLFDXWRQRP\LVQRW YLHZHGDVDWKUHDW/RFDWLRQLQWKH/L$XWRQRPRXV5HJLRQVKDVEHFRPHDPDUNHWLQJVWUDWHJ\WR FRQYLQFHWRXULVWVWKDWWKHYLOODJHVDUH´DXWKHQWLFµ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·(FRQRPLFGHYHORSPHQWDQGPDVVWRXULVPGHYHORSPHQWKDYHEHHQSULRULWL]HGDQG FRPPRGLILFDWLRQLVFRPPRQLQWKHYLOOD JHV7KHHIIHFWRIVWDWHUHJXODWLRQLVPRGHUDWHDQGHWKQLF SUHVHQWDWLRQKDVEHFRPHDVWUDWHJ\WRDWWUDFWWRXULVWV 181 9LVLWRUV 6XUYH\ UHVHDUFK LQ WKUHH VHOHFWHG IRON YLOODJHV LQGLFDWHV WKDW LQ WKH +DLQDQ IRON YLOODJHV YLVLWRUV VKRXOGQRWEHVHHQDV´FXOWXUDOWRXULVWVµ7KHPDMRULW\ RIWRXULVWVFRPHIURPPDLQODQG&KLQD RQ SDFNDJH WRXUV ZKLFK DUH WKH HDVLHVW ZD\ WR WUDYHO WR DQG ZLWKLQ +DLQDQ $OWKRXJK WRXULVWV VKRZHGLQWHUHVWLQHWKQLFFXOWXUHVWKHPDMRULW\KDVOLWWOHNQRZOHGJHRIHWKQLFLW\DW EHVWWKHEOXUUHG LPDJHVIURPPDVVPHGLD7KH\XVXDOO\ODFNWKHWLPHDQGWKHGHSWKRIH[SHULHQFHWRXQGHUVWDQGWKH PRUH FRPSOH[ DQG LQWULFDWH DVSHFWV RI HWKQLF FXOWXUH ,W LV PRUH DSSURSULDWH WR FDOO WKHP ´FRLQFLGHQWDOFXOWXUDOWRXULVWVµZKRDUHQRWZHO OSUHSDUHGIRUDWRXURIDYLOODJHDQGWKHLUNQRZOHGJH RQHWKQLFLW\LVVXSHUILFLDO )LJXUH SUHVHQWV WKH SDWWHUQ RI FRQVWUXFWV IURPDWRXULVW·VSHUVSHFWLYH7KHLURSLQLRQV WRZDUGIRONYLOODJHVWHQGWREHRSHQ HQGHG7RXULVWVKDYHDGLVWLQFWSHUFHSWLR QRIFRQVWUXFWVDQG ORRNHGIRUDQRQFRQWULYHGHWKQLFSUHVHQWDWLRQLQWKHYLOODJHV7KH\KDYHQRRSLQLRQVDERXWWKH HWKQLFSUHVHQWDWLRQVDQGH[SHFWWRVHHIRVVLOL]HGDVSHFWVRIHWKQLFSUHVHQWDWLRQLQWKHYLOODJH7KH\ ZRXOG OLNH WR VHH DQ ´DXWKHQWLFµ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´PXVXPLILHGµSUHVHQWDWLRQRIHWKQLFFXOWXUH 7RXULVWVLQ+DLQDQYLOODJHVFDQEHYLHZHGDVSDVVLYHREVHUYHUVDQGRSSRUWXQLWLHVIRUWKHPWR DFWLYHO\H[SHULHQFHRUSDUWLFLSDWHLQWKHHWKQLFFXOWXUHVHOGRPRFFXUV7RXULVWVMXGJHGWKHLV VXHRI DXWKHQWLFLW\EDVHGXSRQWKHLUSHUFHSWLRQVDQGEOXUUHGLPDJHV$XWKHQWLFLW\LVDMXGJHPHQWRUDYDOXH SODFHGRQWKHVHWWLQJE\WKHWRXULVWV&RQVHTXHQWO\YLOODJHVHQGHDYRXUHGWRPHHWWKHWRXULVWLFJD]H DQGH[SHFWDWLRQVWKDWWXUQHWKQLFLW\LQWR´K\ SHUUHDOLW\µ (WKQLF&RPPXQLWLHV 7KLVWKHVLVVKLIWVWKHUHVHDUFKRQHWKQLFFRPPXQLWLHVWRDVSHFLILFJURXS ²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·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·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²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´VWD\HWKQLFµ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´QDWXUDOUHVRXUFHµZKLFK VKRXOGEHRUFKHVWUDWHGLQZD\VWKDWSOHDVHWRXULVWV DQGDWWUDFWRXWVLGHPRQH\7KLVRULHQWDWLRQRIFRXUVHLVGLIIHUHQWIURPWKDWRIHWKQLFFRPPXQLWLHV ZKRIRFXVSULPDULO\RQFXOWXUDOHYROXWLRQDQGWKHLUZHOOEHLQJ/LFXOWXUHKDVEHHQFRPPRGLWL]HG DQGDXWKHQWLFLW\DSSHDUVWREHDIOH[LEOHQRWLRQWREHQHJRWLDWHGDQGPRXOGHGLQWR DGKRFUHVRXUFHV RUDVVHWVWREH´VSHQWµLQRUGHUWRDFKLHYHHFRQRPLFSULRULWLHV7RXULVWVKDYHOLWWOHNQRZOHGJHRI HWKQLFFXOWXUHVDQGWKHLULPSUHVVLRQRIYLOODJHVWHQGVWR EHVXSHUILFLDO7RXULVWVKDYHSHUFHSWLRQVRI DXWKHQWLFLW\KRZHYHUWKHLUMXGJHPHQWVUHO\RQEOXUUHGLPDJHVZKLFKGRQRWSURYLGHFRQVWUXFWLYH LGHDVIRUIXWXUHGHYHORSPHQW7KH\ORRNDWHWKQLFFXOWXUHVDVEHLQJGLVWLQFWLYHDQGGLIIHUHQWIURP ´PDLQVWUHDPSHRSOHµ KRZHYHUWKHWHUPLVXVHG $OWKRXJKYLVLWRUVDUHDZDUHWKDWFHUWDLQHWKQLF DUWVFUDIWVPXVLFDQGGDQFHSHUIRUPDQFHDUHXQLTXH DQGPDUNHWDEOHIRUWKDWUHDVRQ WKH\W\SLFDOO\ IDLO WR VHH EH\RQG WKLV IDoDGH DQG VHOGRP FRPSUHKHQG JUHDWHU PRUH SUR IRXQG GLIIHUHQFHV RU 185 YXOQHUDELOLWLHV )LQDOO\ GDQFH SHUIRUPHUV FRQVLGHUHG WKHLU MREV DQG UHPXQHUDWLRQV (FRQRPLF GHYHORSPHQWLVWKHPDMRULVVXHIRUHWKQLFSHRSOHSDUWLFLSDWLQJLQDGDQFHFDUHHU'DQFHUVDUHZLOOLQJ WRSHUIRUPDOPRVWDQ\SURJUDP&RQVH TXHQWO\WKLVOHDGVWR´VWDJHGµDXWKHQWLFHYHQWVWRFDWHUWR WRXULVWV·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·$WWLWXGHV7RZDUG)LYH3DUDGR[HV 1RQ&RPPHUFLDOL]DWLRQ &XOWXUDO (YROXWLRQ YV (FRQRPLF 'HYHORSPHQW (WKQLF $XWRQRP\ YV 6WDWH 0DVV 7RXULVP YV &RPPRGLILFDWLRQ 0XVHXPLILFDWLRQ YV &XOWXUDO 3UHVHUYDWLRQ 5HJXODWLRQ 'HYHORSPHQW YV 6XVWDLQDEOH &XOWXUDO 7RXULVP *RYHUQPHQWV • /L FXOWXUHV KDYH EHHQ • 7KH SROLFLHV VHHN WR ´IRVVLOL]Hµ • (FRQRPLF GHYHORSPHQW LV • 7RXULVP LV KLJKO\ • *RYHUQPHQWV VXSSRUW FRPPRGLILHG ZLWK WKH FHUWDLQ DVSHFWV RI FXOWXUDO ZLGHO\ VXSSRUWHG FHQWUDOL]HG ZLWKLQ VWDWH PDVV WRXULVP VXSSRUW RI VWDWH SROLFLHV WUDGLWLRQ • *RYHUQPHQWV YLJRURXVO\ DJHQFLHV 6WDWH VXSSUHVVHV GHYHORSPHQW DQG SODQ • /L DUH DVVRFLDWHG ZLWK • &XOWXUDO HYROXWLRQ LV VHHQ DV D HQFRXUDJH FRPPHUFLDO DQ\ ´WUXHµ DXWRQRPRXV WR PRYH WR HFRORJLFDOO\ VSHFLILF DQG GHOLPLWHG VWHS WRZDUGV ´+DQLILFDWLRQµ GHYHORSPHQW 7RXULVP LV ULJKWV IULHQGO\ WRXULVP FXOWXUDO PDUNHUV 7KH 3ROLFLHV IRFXV XSRQ UHJDUGHG DV DQ LPSRUWDQW • 3URYLQFLDO DQG ORFDO SURGXFWV DXWKHQWLFLW\ RI /L FXOWXUHV ´GLVWLQFWLYHQHVVµ ZKLFK OHDGV ZD\ WR UHYLYH YDQLVKLQJ JRYHUQPHQW LV FRQWUROOHG • 6XVWDLQDEOH FXOWXUDO LV GHWHUPLQHG E\ WKH ORFDO WR WKH FUHDWLRQ RI IRON YLOODJHV HWKQLF FXOWXUHV E\ RIILFLDOV VHQW IURP WRXULVP KDV \HW WR EH JRYHUQPHQWV DV ´RSHQ DLU PXVHXPVµ PDLQODQG &KLQD UHDOL]HG 7RXULVP • /L FXOWXUHV KDYH EHHQ • $ KLJK VWDWH RI • (FRQRPLF LQWHUHVWV DUH • (WKQLF DXWRQRP\ LV D • %XVLQHVV KLQJHV XSRQ %XVLQHVVHV FRPPRGLILHG ´PXVHXPLILFDWLRQµ LQ YLOODJHV SULRULWL]HG DQG WKLV KDV PDUNHWDEOH VWUDWHJ\ WR WKH QXPEHU RI WRXULVW • $XWKHQWLFLW\ LV D IOH[LEOH • 9LOODJH EXVLQHVV SD\V PRUH UHVXOWHG LQ WKH ORVV RI DWWUDFW WRXULVWV DUULYDOV DQG PDVV QRWLRQ 6SHFWDFOH DQG DWWHQWLRQ WR PHHWLQJ WKH DXWKHQWLFLW\ • 7KH HIIHFW RI VWDWH WRXULVP LV KLJKO\ HQWHUWDLQPHQW DUH UDWHG H[SHFWDWLRQ RI WRXULVWV DQG • &XOWXUDO SUHVHUYDWLRQ LV UHJXODWLRQ LV PRGHUDWH HQFRXUDJHG PRUH KLJKO\ SRVLWLRQV VHOHFWHG DVSHFWV RI /L YLHZHG DV D UHVSRQVLELOLW\ • 6XVWDLQDEOH WRXULVP FXOWXUH LQ DQ HQWHUWDLQLQJ ZD\ WDNHQ FDUH RI E\ WKH SODQQLQJ LV QRQ JRYHUQPHQWV H[LVWHQW 7RXULVWV • 3HUFHSWLRQ RI DXWKHQWLFLW\ • 7RXULVWV KDYH OLWWOH NQRZOHGJH • 7RXULVWV LQMHFW VLJQLILFDQW • 7RXULVWV KDYH QHXWUDO • 0DVV WRXULVP LV LV VWURQJ DQG RI HWKQLF FXOWXUHV DPRXQW RI PRQH\ LQ YLHZSRLQWV WRZDUGV HWKQLF SRSXODU DQG WKH FRPPRGLILFDWLRQ LV • 7RXULVWV H[SHFW TXDLQWO\ QRQ YLOODJHV E\ EX\LQJ DXWRQRP\ PDMRULW\ RI WRXULVWV UHJDUGHG DV D SUREOHP E\ PRGHUQ HWKQLF SUHVHQWDWLRQ VRXYHQLUV • 7RXULVWV KRSH FRPH IURP WKH SDFNDJH VRPH WRXULVWV • 7RXULVWV GR QRW SDUWLFLSDWH JRYHUQPHQWV UHJXODWH WKH WRXU • 7RXULVWV KDYH D EOXUUHG LQ WKH SURFHVV RI FXOWXUDO YLOODJH EXVLQHVV • 6XVWDLQDELOLW\ PHDQV LPDJH RI HWKQLF FXOWXUH SUHVHUYDWLRQ PRUH LQIRUPDWLRQ RQ DQG D VXSHUILFLDO HWKQLF FXOWXUHV LPSUHVVLRQ RI YLOODJHV (WKQLF • 'DQFH SHUIRUPDQFH KDV • 'DQFH SHUIRUPDQFH LV WRWDOO\ • (FRQRPLF JDLQ LV WKH • 7KH FRQWURO RI WRXULVP E\ • 0DVV WRXULVP LV &RPPXQLWLHV EHHQ PRGLILHG WR FDWHU WR GLIIHUHQW IURP WKH SUHVHQW PDMRU LVVXH IRU HWKQLF HWKQLF SHRSOH LV ZHDN ZHOFRPHG WR NHHS WKH WRXULVWV UHDOLW\ GDQFHUV • (WKQLF SHRSOH DUH FXUUHQW EXVLQHVV • (WKQLF GDQFH LV YLHZHG DV • &XOWXUDO HYROXWLRQ LV QRW • (WKQLF GDQFH LV YLHZHG DV JRYHUQHG E\ ERWK ORFDO • (WKQLF PLQRULW\ LV QRW D IRUP RI HQWHUWDLQPHQW SUHVHQWHG D VSHFWDFOH IRU JRYHUQPHQW DQG YLOODJH DZDUH RI VXVWDLQDEOH DQG WRXULVP LV YLHZHG DV D HQWHUWDLQPHQW FRXQFLO GHYHORSPHQW JHQHUDWRU RI MREV 187 )LJXUH*RYHUQPHQWV·3HUVSHFWLYH Economic Development Ethnic Autonomy Cultural Evolution Mass Tourism Development Non-commercialization Commodification Sustainable Cultural Tourism Museumification State Regulation Cultural Preservation )LJXUH7RXULVP%XVLQHVVHV·3HUVSHFWLYH Economic Development Ethnic Autonomy Cultural Evolution Mass Tourism Development Non-commercialization Commodification Sustainable Cultural Tourism Museumification State Regulation Cultural Preservation 188 )LJXUH7RXULVWV·3HUVSHFWLYH Economic Development Ethnic Autonomy Cultural Evolution Mass Tourism Development Non-commercialization Commodification Sustainable Cultural Tourism Museumification State Regulation Cultural Preservation )LJXUH(WKQLF&RPPXQLWLHV·3HUVSHFWLYH Economic Development Ethnic Autonomy Cultural Evolution Mass Tourism Development Non-commercialization Commodification Sustainable Cultural Tourism Museumification State Regulation Cultural Preservation 189 &+$37(57(1 &21&/86,216 &XOWXUDOWRXULVPLVDIRUPRIFXOWXUDOSURGXFWLRQ,WWDNHVSODFHGWKURXJKVHYHUDOPHGLD²WRXUVIRON YLOODJHV DQG WKH OLNH 9DULRXV DVSHFWV RI HWKQLF FXOWXUH ² PXVLF GDQFH FUDIWV VWRULHV VLWHV DUFKLWHFWXUH²DUHUHSUHVHQWHGWRYLVLWRUVE\WUDGLWLRQEHDUHUVSHUIRUPHUVWRXUJXLGHVDQGRWKHUV 6RPHRQHSD\V²YLVLWRUVJRYHUQPHQWVRURUJDQL]DWLRQV,QWKHPL[DFRPSOH[SURGXFWLRQHPHUJHV D QHZ IRUP RI FXOWXUH WKDW UHIOHFWV WKH YDULHG LQWHUHVWV JRDOV DQG VHQVLELOLWLHV RI VWDNHKROGHUV 8QWDQJOLQJWKHYDULRXVZD\VRIDXWKHQWLFDWLQJFXOWXUDOWRXULVPLVDFRPSOLFDWHGWDVN7KHJRDORI WKLV WKHVLV LV WR GHYHORS D FRQFHSWXDO IUDPHZRUN WR DQDO\]H DQG HYDOXDWH WKH DXWKHQWLILFDWLRQ E\ GLIIHUHQW VWDNHKROGHUV RI FXOWXUDO WRXULVP LQ D VSHFLILF VHWWLQJ 7KH IROORZLQJ REMHFWLYHV ZHUH IRUPXODWHG DQG HPSOR\HG WR JXLGH WKH SURMHFW LQ DGGUHVVLQJ WKH UHVHDUFK JRDO FRQVWUXFW D UHVHDUFK IUDPHZRUN IRFXVHG RQ WKH LVVXH RI DXWKHQWLILFDWLRQ E\ LGHQWLI\LQJ IRXU NH\ VWDNHKROGHUV LQYROYHGLQFXOWXUDOWRXULVP WUDFHWRXULVPGHYHORSPHQWLQ+DLQDQDQGH[DPLQHWKHLQYROYHPHQW RI+DLQDQ/LPLQRULWLHVLQWRXULVPGHYHORSPHQW)RONYLOODJHVKDYHEHHQLGHQWLILHGDVDVLJQLILFDQW SRLQWRIDFFHVVIRULQYHVWLJDWLQJWKHWHQVLRQVLQDXWKHQWLFDWLQJFXOWXUDOUHVRXUFHV DSSO\DYDULHW\ RIUHVHDUFKPHWKRGVDQGXQGHUWDNHHPSLULFDOUHVHDUFKWKURXJKFROOHFWLRQRISULPDU\GDWDIURPWKH IRXU LGHQWLILHG JURXSV RI VWDNHKROGHUV DQG FRPSDUH DQG DQDO\VH WKH ILQGLQJV E\ DUUD\LQJ VWDNHKROGHUV RQ ILYH SDUDGR[HV ZKLFK FRQVWLWXWH D FRQFHSWXDO IUDPHZRUN IRU WKH H[DPLQDWLRQ RI DXWKHQWLILFDWLRQDQGWHVWWKHXWLOLW\RIWKHIUDPHZRUN 7KLV ILQDO FKDSWHU RIIHUV D QXPEHU RI FRQFOXVLRQV EDVHG RQ WKH HYLGHQFH SUHVHQWHG WKURXJKRXWWKHSUHYLRXVFKDSWHUV,WDOVRRXWOLQHVWKHRUHWLFDOLPSOLFDWLRQVPDNHVUHFRPPHQGDWLRQV IRUWRXULVPSODQQHUVDQGVXJJHVWVRSSRUWXQLWLHVIRUIXWXUHUHVHDUFK 190 7KHRUHWLFDODQG3UDFWLFDO,PSOLFDWLRQVRIWKH&RQFHSWXDO)UDPHZRUN 7KH IUDPHZRUN SURSRVHG LQ &KDSWHU LV XVHIXO IRU XQGHUVWDQGLQJ WKH DXWKHQWLILFDWLRQ RI HWKQLF FXOWXUHV LQ D GHYHORSLQJ FRXQWU\ GHVWLQDWLRQ &XOWXUDO WRXULVP KHUH UHIHUV WR WRXULVPDFWLYLWLHVLQ ZKLFKHWKQLFSHRSOHDUHGLUHFWO\LQYROYHGHLWKHUWKURXJKFRQWURORIWKHWRXULVPRIIHULQJVDQGRUE\ KDYLQJWKHLUFXOWXUHVHUYHDVWKHHVVHQFHRIWKHDWWUDFWLRQ +LQFKDQG%XWOHU 7KHUHIRUHLW HQFRPSDVVHV D YDULHW\ RI GLPHQVLRQV LQFOXGLQJ WKH VRFLDO HFRQRPLF DQG SROLWLFDO DV ZHOO DV DWWULEXWHVRIWKHSK\VLFDOHQYLURQPHQW&XOWXUDOWRXULVPSURPRWHVWKHHWKQLFFXOWXUHDQGLWVKHULWDJH WRWKHODUJHUZRUOGLQDYDULHW\RIZD\V'LIIHUHQWVWDNHKROGHUVDUHLQYROYHGZLWKDFKLHYLQJJRDOV FHQWUHG DURXQG WKH HWKQLF FXOWXUH +RZHYHU GLIIHUHQW VWDNHKROGHUV KDYH GLIIHUHQW JRDOV DQG REMHFWLYHVHJWKHEXVLQHVVVHFWRUSULRULWL]HVHFRQRPLFGHYHORSPHQWZKLFKLVSULPDULO\FRQFHUQHG ZLWKJHQHUDOHFRQRPLFJURZWKWKDWLVFORVHO\WLHGWRSOHDVLQJYLVLWRUV 7KLV FRQFHSWXDO IUDPHZRUN LV HPSOR\HG WR HQKDQFH XQGHUVWDQGLQJ RI WKH DXWKHQWLFLW\ RI FXOWXUDO WRXULVP ZKHQ LQGLJHQRXV FRPPXQLWLHV H[SHULHQFH WRXULVP GHYHORSPHQW 7KH ILQGLQJV VXJJHVWWKDWDXWKHQWLFLW\LVUHODWLYHUDWKHUWKDQDEVROXWHDQGOLNHEHDXW\LVLQWKHH\HRIWKHEHKROGHU ,W LV GHVLUDEOH WR VKLIWIURPDSUHYLRXVIRFXVRQWKHQDWXUHDQGLGHQWLILFDWLRQRIDXWKHQWLFLW\WRD IRFXVRQWKHPRUHWUDFWDEOHTXHVWLRQRIDXWKHQWLILFDWLRQ7KLVWKHVLVSURSRVHVWKDWLWLVPRUHXVHIXO WR HYDOXDWH ZKR DXWKHQWLFDWHV UDWKHU WKDQ WR DGKHUH WR VRPH DEVROXWH VWDQGDUG RI ´DXWKHQWLFµ HWKQLFLW\ ,Q RWKHU ZRUGV LW ZLOO EH PRUH FRQVWUXFWLYH WR LGHQWLI\ WKRVH ZKR PDNH FODLPV IRU DXWKHQWLFLW\DQGWKHLQWHUHVWVWKDWVXFKFODLPVVHUYH7KHIROORZLQJUHVHDUFKLPSOLFDWLRQVVHUYHWR SURPRWH DQ XQGHUVWDQGLQJ RI FXOWXUDO WRXULVP LQ &KLQD DV ZHOO DV FRQWULEXWH WR WKH OLWHUDWXUH RQ WRXULVPDQGSODQQLQJLQGHYHORSLQJDUHDV 7KH FRQFHSWXDO IUDPHZRUN LGHQWLILHV IRXU NH\ VWDNHKROGHUV LQ D &KLQHVH FRQWH[W JRYHUQPHQWV WRXULVPEXVLQHVVHV YLVLWRUVDQG HWKQLFFRPPXQLWLHV)LYHSDUDGR[HVEDVHG XSRQ6ZDLQ·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´WUDGLWLRQDOµOLIHVW\OHLQ´QRQFRPPHUFLDOµHQYLURQPHQWV7KH\DUHHQFRXUDJHG WR MRLQ WKH \RXQJ GDQFHUV DW WKH HQG RI WKH WUDGLWLRQDO /L GDQFH DQG WKH GDQFH PD\ QRW EH OHVV DXWKHQWLFIRUWKHRQORRNHUVIRUKDYLQJQRQ/LGDQFHUVLQWKHLUPLGVW7KHUHODWLRQVKLSRIPDUNHUWR YLVLWRU RI QRQFRPPHUFLDO WR FRPPRGLILHG LV KLJKO\ G\QDPLF 6XFK FRPELQDWLRQV VXJJHVW WKDW DXWKHQWLFLW\LVQHJRWLDEOH 7KHQDWXUHRIGDQFHSURJUDPVKDVEHHQPRGLILHGWRILWWRXULVWV·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´QHZµ UHVWUXFWXUHG RU UHLQWHUSUHWHG IRUP DQG VW\OH KDYH HPHUJHG DV ´DXWKHQWLFµ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´FLYLO VRFLHW\µ DQG ´KXPDQ ULJKWVµ 7KH VRRQHU WKH HWKQLF PLQRULWLHV DUH OHJLWLPDWHO\ LQFRUSRUDWHGLQWRWKHGHFLVLRQPDNLQJSURFHVVWKHEHWWHULWZLOOEHIRUWRXULVPGHYHORSPHQWLQWKH GHVWLQDWLRQDUHDV7KLVDVPDQ\UHVHDUFKHUVKDYHDUJXHGLVZKDW´MXVWWRXULVPµLVDERXW +XOWVPDQ 7KHIROORZLQJSURYLGHVUHFRPPHQGDWLRQVIRUFXOWXUDOWRXULVPGHYHORSPHQWLQ+DLQDQ7KH UHODWLYHLPSRUWDQFHRIHDFKUHFRPPHQGDWLRQLVJLYHQE\WKHRUGHURISUHVHQWDWLRQ ,QWHUPVRIWKHSRVLWLRQRIWKHHWKQLFFRPPXQLWLHVLWDSSHDUVWKDWLJQRUDQFHLVWKHJUHDWHVW EDUULHU WR HIIHFWLYH SDUWLFLSDWLRQ )RU PRVW /L SHRSOH DQG ORFDO JRYHUQPHQWV WKH XUEDQ EXVLQHVV FXOWXUH LV DQ DOLHQ IHDWXUH WKDW KDV VXUIDFHG LQ WKHLU FRPPXQLW\ LQ WKH ·V )XUWKHUWKH\DUHQRWLQDSRVLWLRQWRFRPSHWHZLWKH[SHULHQFHGRSHUDWRUVZKRDUHDOUHDG\ ZHOO FRQQHFWHG ZHOO IXQGHG DQG KDYH DFFHVV WR SODQQLQJ DQG EXVLQHVV LQWHOOLJHQFH )RON YLOODJHV LQ +DLQDQ DUH JHQHUDOO\ VPDOO VFDOH DQG ODFN SURSHU SODQQLQJ DQG DGPLQLVWUDWLYH VXSSRUW 7KXV LJQRUDQFH DV D EDUULHU LV QRW UHVWULFWHG WR WKH /L SRSXODWLRQ DORQH LW DOVR DIIHFWVWKHSODQQLQJPDFKLQHU\DQGWKHEXUHDXFUDF\YHVWHGZLWKWKHWDVNRILPSOHPHQWDWLRQ 7RRYHUFRPHWKHDERYHFRQVWUDLQWVLWLVLPSHUDWLYHWKDWDQHWKQLFSROLF\EHLQWHJUDWHGLQWR WKH WRXULVP SODQQLQJ SURFHVV )RU H[DPSOH VWUDWHJLHV VKRXOG EH LPSOHPHQWHG E\ WKH SURYLQFLDODQGORFDOJRYHUQPHQWVWRPDQGDWHFRQVXOWDWLRQZLWKWKHHWKQLFFRPPXQLWLHVDQG WKHLUUHSUHVHQWDWLYHVWRHQVXUHWKDWPLQRULW\SHRSOH·VLQWHUHVWVDUHSURWHFWHGDQGWKDWWKH\DUH HQFRXUDJHGWREHDFWLYHO\LQYROYHGLQWKHWRXULVPGHYHORSPHQWSURFHVV,WLVUHFRPPHQGHG WKDWWKHSURYLQFLDOJRYHUQPHQWLQLWLDWHD´URXQGWDEOHµ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´VWD\HWKQLFµ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´FDQWXUQH[RWLFFXOWXUHVLQWRFRPPRGLWLHVDQGLQGLYLGXDOVLQWR DPXVLQJ ¶REMHFWV· IRU WRXULVW ¶FRQVXPSWLRQ·µ .OLHJHU S $V D UHVXOW QRYHO HQFRXQWHUV JUDGXDOO\ EHFRPH URXWLQH IRU ERWK WRXULVWV DQG WKH HWKQLF KRVWV DQG FXOWXUDO SUHVHQWDWLRQVEHFRPHPRUHDQGPRUHUHPRYHGIURPWKHUHDOLW\RIHYHU\GD\OLIH7KHUHODWHG WHPSWDWLRQWR´IUHH]HµFXOWXUHVKRXOGEHDYRLGHG&XOWXUHLVQRWDVWDWLFHQWLW\DVDOO´YLDEOH FXOWXUHVDUHLQWKHSURFHVVRI¶PDNLQJWKHPVHOYHVXS·DOOWKHWLPHµ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· DSSUHFLDWLRQ IRU ERWK WKH HWKQLF FXOWXUDO GLVSOD\V DQG /L FXOWXUH DV D ZKROH ZRXOG EH HQKDQFHG 198 2QHRIWKHJUHDWHVWSDUDGR[HVHQFRXQWHUHGLQWKHIRONYLOODJHVLVWKHFRQWUDGLFWLRQEHWZHHQ HWKQLFWUDGLWLRQDQGFRQWHPSRUDU\OLIHVW\OH)URPDYLVLWRU·VSHUVSHFWLYH/LFXOWXUHVKRXOG EHGLIIHUHQWIURPZKDWFDQEHFDOOHG´PDLQVWUHDPµFXOWXUH7KLVRIFRXUVHGRHVQRWPHDQ /LFXOWXUHLVWRWDOO\DOLHQDWHGIURPPDLQODQG&KLQHVHFXOWXUHV'XHWRDQXQIRUWXQDWH FKDXYLQLVPHWKQLFFRPPXQLWLHVPD\IHHOWKDWODEHOVVXFKDV´IRONµRU´WUDGLWLRQDOSHUVRQµ DUHGHJUDGLQJDQGLQVXOWLQJ+RZHYHUWKHVHODEHOVRIWHQKDYHDQHFRQRPLFYDOXHDQGFDQEH VROG WR WKH ODUJHU ZRUOG DV WRXULVP VHUYLFHV DQG SURGXFWV 0DQ\ VLJQLILFDQW DQG SRVLWLYH HOHPHQWVRIHWKQLFFXOWXUHVDUHEDVLFDQGHQULFKLQJDQGEHQHILWVDFFUXHERWKWRPHPEHUVRI WKH HWKQLF FRPPXQLWLHV DQG WR VRFLHW\ LQ JHQHUDO 6KDULQJ ´WUDGLWLRQDO FXOWXUHµ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´FXOWXUDOFRUULGRUµ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·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·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·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·V6RFLDO&ULWLTXHRI&XOWXUH1HZ+DYHQ 205 *HHUW]& 7KHLQWHJUDWLYHUHYROXWLRQSULPRUGLDOVHQWLPHQWVDQGFLYLOSROLWLFVLQWKH QHZVWDWHV,Q*HHUW]& HG 7KH,QWHUSUHWDWLRQRI&XOWXUHV6HOHFWHG(VVD\V1HZ 206 +DQGOHU5DQG-/LQQHNLQ 7UDGLWLRQJHQXLQHRUVSXULRXV-RXUQDORI$PHULFDQ)RONORUH +DQGOHU5DQG6D[WRQ: 'LVVLPXODWLRQUHIOH[LYLW\QDUUDWLRQDQGWKHTXHVWIRU DXWKHQWLFLW\LQ´OLYLQJKLVWRU\µ&XOWXUDO$QWKURSRORJ\ +DQVRQ$ 7KHPDNLQJRIWKH0DRULFXOWXUDOLQYHQWLRQDQGLWVORJLF$PHULFDQ$QWKURSRORJLVW +DUNLQ0 0RGHUQLVWDQWKURSRORJ\DQGWRXULVPRIWKHDXWKHQWLF$QQDOVRI7RXULVP 5HVHDUFK +DUUHOO6 &XOWXUDO(QFRXQWHUVRQ&KLQD·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·V&RQJUHVV LQ&KLQHVH %HLMLQJ3HRSOH·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·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·VWUDQVLWLRQDOHFRQRP\LQWHUSUHWLQJLWVVLJQLILFDQFH7KH&KLQD4XDUWHUO\ :DOO* 3HRSOHRXWVLGHWKHSODQV3DSHUSUHVHQWHGDWWKH,&&7FRQIHUHQFH 214 :HQ-DQG7LVGHOO& 7RXULVPDQG&KLQD·V'HYHORSPHQW²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·WNQRZ ,I\RXDUHIDPLOLDUZRXOG\RXSOHDVHLQGLFDWHZKDWSDUWRIHWKQLFLW\" FXOWXUH KLVWRU\ IRONORUH GDQFHVRQJ RWKHUBBBBBBBBBBB 'R\RXILQGWKLVYLOODJHLVDXWKHQWLFDOO\UHIOHFWWKHOLIHDQGFXOWXUHRIHWKQLF/LDQG0LDR" \HV QR GRQ·WNQRZ 216 +RZPXFKPRQH\GLG\RXVSHQGRQVKRSSLQJLQWKHYLOODJH"BBBBBBBBBBBBBBBBB \XDQ :KDWNLQGRIVRXYHQLUGLG\RXSXUFKDVHLQWKHYLOODJH"BBBBBBBBBBBBBBBBBBBBBB :KDWLV\RXUVXJJHVWLRQIRUWKHVRXYHQLU"$QGZKDWLV\RXUPRVWLQWHUHVWHGVRXYHQLU" BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 'LG\RXWDNHSKRWRVLQWKHYLOODJH" \HV QR ,I\RXGLGZKDWNLQGRISKRWRVGLG\RXWDNH" HWKQLFDUFKLWHFWXUH GDQFHSHUIRUPDQFH HWKQLFFORWKLQJFRVWXPH HWKQLFFKLOGUHQJLUO VFHQHU\ RWKHUBBBBBBBBBBBBBBBBBBBB :KDWLV\RXUVXJJHVWLRQIRUWKHIXWXUHLPSURYHPHQWLQWKHYLOODJH" BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 3OHDVHLQGLFDWH\RXUOHYHORIVDWLVIDFWLRQGXULQJWKHWULSLQWKHIRONYLOODJH5DWLQJVFDOH UDQJHG IURPYHU\GLVVDWLVIDFWRU\WRYHU\VDWLVIDFWRU\ 9HU\ 6DWLVIDFWRU\ 9HU\ 'LVVDWLVIDFWRU\ $WWULEXWH 9LOODJH/RFDWLRQ $UFKLWHFWXUH'HVLJQ 'DQFH3HUIRUPDQFH (WKQLF&ORWKLQJ&RVWXPH 6RXYHQLU4XDOLW\ 6WDII6HUYLFH4XDOLW\ 7RXU*XLGH6HUYLFH4XDOLW\ $GPLVVLRQ7LFNHW3ULFH 2YHUDOO,PSUHVVLRQ 217 $SSHQGL[,, ,QWHUYLHZ3URWRFRO $QXPEHURILQWHUYLHZVZHUHFRQGXFWHGLQIRONYLOODJVRI+DLQDQIURP0D\WR$XJXVW7KH LQWHUYLHZVZHUHFDUULHGRXWE\ERWKVHPLVWUXFWXUHGDQGRSHQHQGHGIRUPDWV7KHLQWHUYLHZVZHUH UHFRUGHGE\WDNLQJWKHQRWHVDQGDQDVVLVWDQWIURP8QLYHUVLW\RI+DLQDQ7KHRXWOLQHVRIREMHFWLYHV RILQWHUYLHZVDUHDVIROORZV 0HHW ZLWK UHOHYDQW SHUVRQV LQ WKH /L DGPLQLVWUDWLYH OHYHOV DQG GHWHUPLQH DWWLWXGHV WRZDUG WRXULVPDQGHWKQLFWRXULVPGHYHORSPHQW ,QWHUYLHZIRONYLOODJHPDQDJHUVUHJDUGLQJWKHQXPEHUORFDWLRQDQGRSHQLQJGDWHRIDOO/L IRONYLOODJHVLQ+DLQDQ ,QWHUYLHZZLWKUHVHDUFKHUVIURP+DLQDQ(WKQLFLW\5HVHDUFK&HQWUHLQ7RQJ]KDWRGHWHUPLQH WKHORFDWLRQRIRWKHUWRXULVPRULHQWHGIRONGLVSOD\V &ROOHFWEURFKXUHVSHUWDLQLQJWRHWKQLFFXOWXUHVLQ+DLQDQGXULQJWKHLQWHUYLHZ ,QWHUYLHZWKHGLUHFWRUVRIHDFKIRONYLOODJHWRGHWHUPLQHWKHQDWXUHRIH[SHULHQFHVSURYLGHG RZQHUVKLSHPSOR\PHQWVWUXFWXUHDQGDWWLWXGHVIRUIXWXUHGHYHORSPHQW ,QWHUYLHZHPSOR\HHV HJGDQFHSHUIRPHUV FRQFHULQJHPSOR\HHV·TXDOLILFDWLRQMREWUDLQLQJ HWKQLFLW\ZKHUHWKH\FRPHIURPMREVWDWXVOHYHORIVDWLVIDFWLRQHWF ,QWHUYLHZ VWUHHW YHQGRUV FRQFHUQLQJ WKH EXVLQHVV HWKQLFLW\ LQFRPH DQG DWWLWXGHV WRZDUGV YLOODJHEXVLQHVV 218