What has happened since China unofficially banned K-pop?
Last week, we had a look at the explosive growth of the South Korean cultural industry on a global scale. For this blog, let us bring Korea’s neighbour — China — into the picture. In 2016, China introduced an unofficial ban on hallyu (the Korean wave) imports to make its political points. Has this ban brought nothing but bad news? Or could there be some silver lining?
Some contextual information on the ban. In 2016, South Korea decided to cooperate with its political ally the United States to install the THAAD missile defence system, despite strong opposition from Beijing because it could potentially jeopardise China’s security interests. Nothing was (or could be) done by China to stop the installation. Therefore, China retaliated by posing restrictions on Korean cultural products which at that time has gained much popularity among young Chinese.
China is one of Korea’s most profitable cultural export markets, accounting for approximately 27% of Korea’s total cultural industry exports (US$1.1 billion). The Chinese government never officially acknowledged the restrictions, but they certainly hit Korea abrupt and hard. “Any show starring, funded, affiliated, or produced by Korean companies” was halted. Many Chinese investments in the Korean cultural industry pulled out. According to statistics from the Korean Foundation for International Cultural Exchange (KOFICE), the stock prices of K-pop companies fell by an average of 14% in Q3 of 2016 after the THAAD sanctions hit. The figure continued to decline in the fourth quarter. Korea’s cultural industry lost about US$7.7 million. Hallyu-related sectors, such as education and tourism, witnessed their balance of payments surplus shrink by nearly half. The Korean government and the country’s cultural industry became fully aware of how harsh the Chinese can be towards its neighbours when it comes to political matters and how vulnerable their cultural economy was.
The clash between Korean soft power and Chinese hard power served as a wake-up call for the Korean cultural industry. They initiated shifts in rhetoric and target trajectory to reduce their dependence on China as its core market. Korean entertainment corporations looked to other markets for opportunities, including Southeast Asia, North America and South America. And their actions turned out to be fruitful. Hallyu-related cultural exports continued to grow at an ever-accelerating speed and expanded to many different parts of the world. In the Global Hallyu 2020 report, statistics showed that despite the COVID-19 pandemic, the number of hallyu fans worldwide exceeded 100 million for the first time with the U.S. leading the increase. Hallyu also gained huge traction in Europe, Africa and the Middle East.
Let us look back at China’s ban on the Korean cultural industry. If we single out the Chinese market, it is safe to say that the policy was very effective causing huge loss in Korean cultural exports and related industries. But when we zoom out to a global scale, a new perspective may arise. This ban might have contributed to a more balanced development of the Korean cultural industry with more holistic strategic considerations. Well, when God closes a door, he opens a window.