SEOUL, Sept. 18 (Korea Bizwire) — South Korea’s cultural content trade surplus, bolstered by the popularity of “hallyu,” or the Korean wave, has decreased significantly in the first six months of 2017 due to China’s economic sanctions over a missile defense system, government data showed Monday.
China, South Korea’s biggest overseas market, has retaliated against its products, cultural exports and tourism in recent months after Seoul deployed an advanced U.S. missile defense system on its soil.
Beijing sees the Terminal High Altitude Area Defense (THAAD) system as a security threat, although Seoul insists the THAAD battery only is to defend against North Korea’s missile and nuclear threats.
The country’s surplus in the trade of films, dramas, songs and other cultural content was US$179.9 million during the first half of this year, according to the statistics by the Bank of Korea.
The figure is down 23.2 percent, or $54.3 million, from $234.2 million tallied for the second half of last year and a further drop of $96.2 million from $276.1 million reached for the first half of 2016.
South Korea had been enjoying an expansion of surpluses in the trade of cultural content for the past few years, as hallyu has gained popularity in many parts of Asia and around the world.
Hallyu refers to the demand for Korean music, TV dramas and films, as well as the boom of South Korean goods and services abroad.
South Korea posted a $3.8 million deficit in cultural content exports in 2013 before reporting a surplus of $84 million in the following year. The favorable balance rose to $244.9 million and $513 million in 2015 and 2016, respectively.
China has been canceling South Korean cultural events in China in recent months in retaliation against the missile deployment.
The central bank has forecast the Chinese sanctions will lower South Korea’s economic growth rate by 0.2 percentage point this year while reducing employment by 25,000.
The forecast is based on the assumption the number of Chinese tourists will fall by 30 percent and South Korea’s exports to the world’s No. 2 economy will drop by 2 percent.
The Hyundai Research Institute estimated the Chinese sanctions will result in a loss of 8.5 trillion won (US$7.5 billion) in South Korea’s gross domestic product this year.