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A shimmering blue oasis set among the mountains that are the staircase to the nearby Tibetan Plateau, Lugu Lake doesn't need help drawing tourists. But the clusters of wood and mud-brick homes that nestle into its banks are just as special: they are home to one of the world's last surviving matriarchies, though one under new threats as modernity – and money – intrudes.

While the China that surrounds them is a place where men rule and daughters are often looked upon as burdens, the Mosuo tribe that lives along the western edge of Lugu Lake puts women at the centre of society, with children taking their mother's name and living in households where the women make the decisions and take male lovers as they see fit.

Men usually live with their mothers and have little to do with raising their children, who instead grow up in households among four generations of women. In fact, there's no Mosuo word for husband or father; only "walking marriages" that see the male lover invited in for the night but expected to return to his mother's home in the morning. To the fascinated Han Chinese who now come in droves to visit Lugu Lake – and take endless photographs of the Mosuo wearing garish traditional dress for the benefit of the tourists – it's known as the "lake of free love."

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It's a system that has endured efforts by the ruling Communist Party to impose foreign concepts, such as legally binding marriages, on the tribe that today numbers about 40,000 people, and one that Mosuo men and women alike say helps reduce conflicts inside their community.

"I think female leaders are softer, and deal with disputes in a more peaceful way than men. Men deal with disputes using strength. I always joke that if the world were ruled by women, it would be more peaceful," said Aqi Duzhima, the head of Wunquan village, a short drive along the bumpy and broken roads north of Lugu Lake.

The 46-year-old Ms. Aqi – who eschews the traditional dress for a more businesslike sweater and blouse combination – is rare in her community in that she has a legal husband whom she married during a period when the Communist Party was trying to force Mosuo families to take a more conventional structure. But she says the concept of temporary marriages works well for her people.

"People [in other societies] get married for a year, then separate. We say you should use your heart. If this person is in your heart, then you should be together. If the relationship is not good, you don't need a court to resolve this personal business."

The system evolved centuries ago, when Mosuo men joined monasteries or travelled far beyond the mountains of northwest Yunnan to trade with other tribes. While the men were away, the women naturally took on leadership roles, a structure that persists today, at least within the household.

Ms. Aqi's husband, Yang Erche, who lives with his wife and her sister and their children, said there's a simple explanation for why it works. "Everyone [in the household] is related by blood. There's no daughter-in-law," he smiled from under a modest handlebar mustache.

However, Mosuo culture is facing an invisible threat. Money, once tightly controlled by the tribe's matriarchs, is now available to anyone willing to sell "Mosuo cultural experiences" to the swarms of Han tourists (who often treat China's 55 recognized ethnic minority groups as curiosities expected to dress in traditional attire at all times and sing and dance on command) that have discovered the Lugu Lake region and its charms over the past two decades.

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The influx of cash into a region that otherwise relies on small-scale agriculture has helped develop the lakeside town of Daluoshui into a miniature Lake Placid, complete with backpacker lodges, beer bars and a newly built five-star resort. There's also a nightly "Mosuo culture bonfire party," to which the Daluoshui town council mandates each Mosuo household must send one representative to sing and dance around the bonfire for the tourists.

On a recent Thursday night, the crowd of tourists (who paid about $5 a head to enter) happily clapped along to the music and snapped countless photos of the Mosuo at play, but few of the dancers could manage a smile.

"We used to dance and dress like this only for holidays or festivals, so we were happy," said Guota Xiaokumu, a statuesque 30-year-old wearing a traditional shimmering blue top and a gaily decorated cowboy hat. "I'm so tired of dancing every night and performing for strangers. We feel like bootlickers."

At dawn the next morning, Ms. Guota was at it again, this time rowing a traditional wooden boat on Lugu Lake for another crowd of Han tourists. Money, she sighed, was now a more powerful force than any of the Mosuo women.

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