Korea-China Content Exchange Agreement Boosts K-pop’s Return to Chinese Market

Korea and China have signed an official content exchange agreement, significantly increasing the likelihood of K-pop making a comeback in the Chinese market. South Korea’s state broadcaster KBS entered into a media exchange and cooperation agreement with China Media Group (CMG), a state-owned media company in China that operates under direct control of the Chinese Communist Party and includes national media outlets such as China Central Television (CCTV). KBS stated that the agreement will “promote comprehensive content exchanges across various fields, including news and sports, as well as culture, such as the launch in China of ‘Music Bank,’ KBS’s flagship program that features K-pop artists.” Park Jang-beom, chairman of KBS, said it is meaningful to have created a breakthrough that allows South Korea’s entire content industry to re-enter the Chinese market on a serious scale. Following the announcement of the agreement, stock prices in the K-pop industry surged sharply. SM Entertainment’s shares rose by up to 8.11%, while JYP Entertainment’s increased by more than 9.39%. YG Entertainment and HYBE also saw gains of around 4% and 3% respectively before experiencing some declines. So far this year, the stock prices of all four major companies have risen by double digits, with YG’s shares rising by over 100%. The more pronounced rise in SM and JYP’s stock prices can be attributed to the following factors. In JYP’s case, chairman Park Jin-young posted on Instagram a video of him talking with South Korean President Lee Jae-myung and Chinese President Xi Jinping during the state dinner at the Korea-China summit. Kim Yong-bae, a South Korean lawmaker, posted on Facebook that during the conversation, a proposal to hold large-scale concerts in Beijing was made, and President Xi summoned Foreign Minister Wang Yi to issue directives. As for SM, analysts believe it has historically shown the highest sensitivity to news related to China, and the fact that China’s tech company Tencent is its second-largest shareholder has also played a role. This agreement could mark a historic turning point for the K-pop industry, as China has implemented a “soft ban” on K-pop content since 2016 following South Korea’s deployment of the U.S.-made THAAD system. After meeting with President Xi Jinping at the APEC summit, President Lee Jae-myung stated on Facebook that it was “a highly significant summit in terms of fully restoring Korea-China relations.”