The impact of China’s ban on Korean content and entertainments continues to be felt both in South Korea and China. In South Korea, it resulted in a contraction of businesses, while it had the opposite effect on China’s entertainment industry.
THAAD’s Impact
In March, the first pieces of the Terminal High Altitude Area Defense (THAAD) system, a U.S.-built defense system, arrived at the Osan Air Base in South Korea. But even before its arrival, South Korea had felt the impact of China’s wrath over the THAAD which Seoul said is designed to ward off threats from North Korea, not China.
Coupled with the political scandal that resulted in the removal from office of South Korean President Park Geun-hye, the gloom over the country is felt by business. Global Blue, in a report released in February, said that travel retail sales dipped by 19 percent compared to 12 months ago. Sales of Korean beauty products in China went down by 25 percent, according to the Baidu Index, Business Off Fashion reported.
Jung Kuho, executive director of Seoul Fashion Week, pointed out that the last four or five months were complete chaos. “Everyone is so concerned with politics and economy that they don’t want to spend their money. You don’t buy luxury goods when there’s this much uncertainty,” Jung explained.
China Expands
In contrast, Yonhap News reported that after Beijing banned sale of tour packages to South Korea, halted the importation of Korean pop culture products and closed outlets of South Korean shops in China, sales of the cultural industry in the Asian giant jumped 7.5 percent to $1.1 trillion in 2016, based on data from the Korean International Trade Association.
There was a corresponding 13.4 percent hike in added value created by the Chinese cultural industry which accounted for 3.97 percent of China’s GDP. Meanwhile, the market size of internet broadcast in China hit 2.5 trillion won in 2016, a 66.7 percent growth as subscribers rose to 340 million.