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Epex on the MBC Every1 selection display “Weekly Idol” at MBC Dream Center on April 23, 2024, in Goyang, South Korea.
Mbcplus | Imazins | Getty Images
Locked in a business warfare with the United States and suffering with vulnerable home intake, China appears to be like set to make a U-turn on an not going sector: Ok-pop.
It used to be introduced on April 28 that Ok-pop workforce Epex will likely be appearing in Fuzhou, Fujian province, on May 31 — the primary time an all-Korean idol workforce has held a live performance in mainland China since 2016.
On best of that, the large-scale annual Dream Concert — South Korea’s longest-running Ok-pop match — has reportedly been scheduled to happen on Sept. 26 at a 40,000-seat stadium in Hainan province, the Korea Entertainment Producers’ Association stated on April 30.
Those traits may sign an easing of China’s unofficial ban on Ok-pop acts at the mainland after South Korea introduced the deployment of the Terminal High Altitude Air Defense missile protection gadget in 2016, with China announcing the gadget used to be aimed toward constraining China’s energy within the area, amongst different causes.
The about-face on Ok-pop represents a “structural turning point” for the sphere, in line with Oh Jiwoo, analysis analyst on the Korea department of CGS International Securities Hong Kong.
Oh advised CNBC “this policy shift is part of China’s broader strategy to revitalize domestic demand amid a prolonged consumption downturn.”
She famous that intake contributed just about 70% to China’s gross home product expansion in 2018, however the percentage has dropped to under 30% lately, with the rustic’s client worth index expansion soaring close to 0.
“In response, the government has started promoting cultural events—including foreign pop concerts—to stimulate discretionary spending in tourism, hospitality, and local commerce,” she added.
On April 25, China’s ministry of tradition and tourism launched a realize calling for the promotion of cultural occasions, together with live shows and song gala’s.
Oh identified that China is South Korea’s third-largest album export marketplace after Japan and the U.S., and the second-biggest song marketplace in Asia, “underscoring its strategic importance despite years of restrictions.”
Diplomatic detente
China’s softening stance on Ok-pop has a diplomatic measurement that is going past the will to extend home intake, analysts say.
Citi analysts John Wu and Alicia Yap stated in an April 4 be aware that China would possibly search to revive ties with neighboring international locations, together with South Korea, in mild of its personal financial demanding situations.
Members of South Korean girl workforce Twice on the 2018 Mnet Asian Music Awards on the Asia World Expo on Dec. 14, 2018 in Hong Kong.
Vcg | Visual China Group | Getty Images
Cultural international relations may emerge as a key start line, they stated, resulting in the easing of casual bans on South Korean content material and resumption of Ok-pop’s fan-driven income streams within the area. The sector has been described through them as “a long-term beneficiary of [a] changing world order.”
CGS’ Oh echoes that view, telling CNBC that “the reintroduction of K-pop could help diversify cultural offerings and foster regional goodwill.”
She added China seems to be warming ties with South Korea whilst putting brief limits on positive Western content material, together with Hollywood movies.
Oh stated the shift no longer best restores get entry to to a prior to now limited fan financial system, but additionally gifts a chance to deepen cultural engagement in Asia, which can lay the groundwork for longer-term structural expansion within the area.
Ok-pop’s promise
China’s possible include of Ok-pop may energize the South Korean leisure business that holds expansion promise at a time when different industries face tariff threats.
Shinhan Securities’ Ji In-hae wrote in a April 14 be aware that “although the market is very volatile due to the tariffs, [entertainment and media are] not affected by the tariffs at all, while the possibility of China’s opening is valid.”
CGS’ Oh stated, “Core revenue drivers—streaming, concerts, and fan content—are digital and intangible, making them immune to cross-border tariffs.” Even if enthusiasts purchase albums and products, tariff publicity is “negligible,” given low unit costs and constant fan call for.
“In contrast with semiconductors or autos, where global trade policy directly impacts supply chains and pricing, K-pop consumption is far less sensitive to protectionist measures,” she added. Semiconductors and vehicles are two of South Korea’s key exports.
Last month, South Korea introduced a $23 billion make stronger bundle for its semiconductor sector in mild of uncertainty round U.S. price lists. The Trump management has imposed a 25% levy on all cars shipped to the United States, and any other 25% on metal and aluminum imports.
South Korea’s Hyundai and Kia are some of the best 8 bestselling manufacturers within the U.S, in line with automotive market Carpro. The nation could also be the fourth-largest exporter of metal to the U.S. in 2024, in line with the International Trade Administration below the U.S. Commerce Department.
Ok-pop shares
China’s live performance marketplace would supply a considerable spice up in 2025, will have to the rustic carry the unofficial ban on South Korean artistes. CGS’ Joshua Kim wrote in a Feb. 10 be aware that the Chinese live performance marketplace measurement greater from $2.9 billion in 2019 to $8 billion in 2024, rising 189% all through the length.
“Hence, if China lifts the ban on Korean artistes, we expect China to account for more than 25% of concert revenue in 2025, exceeding the contribution in 2016,” he stated.
Morgan Stanley fairness analyst Seyon Park stated she would believe a China reopening a “potentially powerful catalyst” that would pressure profits and honest worth estimates considerably upper, regardless that the reopening may be sluggish.
In Oh’s view, the acclaim for Epex’s live performance is a “policy test case” that would pave the way in which for better acts. She famous that smaller fan occasions through girl teams Twice and IVE in Shanghai may point out China is beginning with mid-tier acts, ahead of progressing to broader re-engagement.
SEOUL, SOUTH KOREA – FEBRUARY 03: IVE attends IVE’s the third mini album ‘IVE EMPATHY’ press convention at Conrad Seoul in Yeongdeungpo-gu on February 03, 2025 in Seoul, South Korea. (Photo through The Chosunilbo JNS/Imazins by the use of Getty Images)
The Chosunilbo Jns | Imazins | Getty Images
Epex is a slightly rookie workforce within the business, having debuted in 2021, however Oh stated that those don’t seem to be remoted approvals, as an alternative, they’re a broader transition towards high-capacity, high-visibility occasions.
“With HYBE, JYP, SM, and YG already positioned for global arena tours, we expect Korean agencies to move quickly in monetizing demand once restrictions are fully lifted. These developments reinforce the case for a multi-phase reopening scenario and present a strong earnings catalyst for the Big Four,” she stated.
Or to cite a 2009 track from YG Entertainment’s 2NE1, Ok-pop is telling China, “it’s been a long time coming, but we’re here now.”
Correction: This tale has been revised to raised replicate the have an effect on of Ok-pop’s re-entry into China, and take away an wrong quote.
