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On April 23, 2024, the MBC Show “Week Cup” at MBC Dream Center on April 23, 2024 in Goyana, South Korea.
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China, recorded in the trade war with the United States and fighting the weak internal consumption, looks to make a turn in the unlikely sector: K-Pop.
This was announced further April 28 that K-Pop Group Epex will perform in Fuzhou, Fujian province, May 31 – for the first time The Surveys Group Idol He held a concert in mainland China since 2016.
In addition, a large-scale annual dream concert is the longest event K-Pop South Korea. Reportedly was scheduled It will take place on September 26 at the stadium of 40,000 place in the province of Hainan, Korean Producers Association said on April 30.
These developments can signal the weakening of China’s unofficial ban on K-Pop on the mainland after South Korea has announced the deployment of a high-height terminal missile defense system with China with China saying the system was aimed at restricting China’s power in the regionAmong other reasons.
According to Oh Jiwoo, CGS International Securities Hong Kong research analytics.
Oh, said CNBC: “This policy shift is part of China’s broader strategy to revive domestic demand against long -term consumption.”
She noted that the consumption brought almost 70% to the growth of gross domestic product in China in 2018, but in recent years the share has decreased to below 30%, and the country’s consumer price growth has increased near zero.
“In response, the government began to promote cultural events – including foreign pop concerts – to stimulate discrete costs for tourism, hospitality and local commerce,” she added.
On April 25, the Chinese Ministry of Culture and Tourism published a message about the promotion of cultural events, Including concerts and music festivals.
Oh, it noted that China-third in size market in South Korea after Japan and the USA, and The second largest music market in Asia“Emphasizing its strategic importance, despite many years of restrictions.”
Tariff sector
It also helps with K-Pop in China, this is the fact that the sector is considered as a tariff.
Ji In-Hae Shinhan securities wrote in the note that “although the market is very unstable due to tariffs (entertainment and media) do not affect tariffs at all, while the possibility of opening China is acting.”
CGS “OH said:” The main drivers of the arms, concerts and content of fans and intangible, making them insured from cross-border tariffs. “Even if the fans buy albums and goods, the tariff exposition is” insignificant “, given the low prices and devotional demands.
“Unlike semiconductors or cars where global trade policy directly affects the supply chains and pricing, K-Pop consumption is much less sensitive to protectionist measures,” she added. Semicists and cars are two key exports of South Korea.
Last month South Korea announced Package Support 23 billion dollars For its semiconductor sector in the light of uncertainty around us tariffs. The Trump administration introduced 25% collection of all vehicles sent to the US, and another 25% of the steel and aluminum imports.
Hyundai and Kia South Korea are some of the Eight best besesellers brands In the US, Car MarketPlace Carpro reports. The country too The fourth largest exporter has become in the US In 2024, according to international trade in the US trade department.
Diplomatic Deta
But China’s softening position on K-Pop has a diplomatic dimension that goes beyond the desire to increase internal consumption, analysts say.
Citi analysts John Wu and Alicia Yap said that on April 4, China may seek to resume ties with neighboring countries, including South Korea, in light of its own economic problems.
Members of the South Korean Girl Group twice at the Mnet 2018 Asian Music Award at the Asia World Expo December 14, 2018 in Hong Kong.
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According to them, cultural diplomacy can be a key starting point, leading to a weakening of informal prohibitions on the content of South Korean and restoration of K-Pop revenue flows in the region. The sector was described as “long -term beneficiary (a) changing world order”.
CGS “OH ROCHOES, which looks like CNBC that” re-introduction of K-Pop can help diversify cultural offers and promote regional good favor. “
She added that China appears to warm up with South Korea, placing temporary restrictions on certain Western content, including Hollywood films.
Oh, he said that the shift not only restores access to the previously limited fan economy, but also presents the ability to deepen cultural activity in Asia, which will lay the basis for long -term structural growth in the region.
Catalyst of K-Pop stocks
Developments can become a good news for K-Pop stocks.
Profit and cost of shares of the four largest companies K-POP-as a “big fours” and all publicly listed- took the beating In 2024. It is despite Legions of fans, multi -city concerts and billions of streams of YouTube Have seen all over the world.
But it seems that the rebound occurs in the first few months of 2025, and three of the four companies that register a significant increase from year to year.
The Chinese concert market will provide a significant increase in 2025, when the country is fired by an unofficial ban on South Korean artists. Joshua Kim CGS wrote on February 10, noting that the size of the Chinese concert increased from $ 2.9 billion in 2019 to $ 8 billion in 2024, increasing 189% over the period.
“So, when China is banning Korean artists, we expect China to be more than 25% of concerts in 2025, exceeding the contribution in 2016,” he said.
Morgan Stanley Equity Seyon Park analyst said China would reopen a “potentially powerful catalyst” that can make revenue and fair value estimates much higher, though the recovery is likely to be gradual.
According to OH, approval to the EPEX concert is a “political test” that can pave the way for great action. She noted that twice the events involving the Group and Yves in Shanghai may show that China begins with mid-level acts before moving to a broader re-interaction.
Seoul, South Korea -February 03: Ive visits the Ive’s 3rd -album “Ive E eleboma” press conference in Conrad Seoul in YeongdeungPo -Gu 03 2025 in Seoul, South Korea. (Photo Chosunilbo JNS/IMAZins via Getty Images)
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Epex is a relatively newcomer in this field, debuting in 2021, but Oh said it was not isolated approval, instead they are a broader transition to events with high capacity.
“With Hybe, Jyp, SM and Yg already placed for Global Arena Tours, we expect Korean agencies to quickly go to monetization when the restrictions are fully lifted. These developments strengthen the case for a multifase scenario of re-opening and represent a strong catalist for a great four,” she said.
Either quote a Song of 2009 With 2ne1 Yg Entertainment K-Pop tells China: “It’s long, but we are here.”
