Korean Wave or hallyu refers to the growing popularity of Korean entertainment, culture, dramas and music in other countries, particularly in East and Southeast Asia. China and Japan were first exposed to South Korean dramas in 1990s. However, Korean dramas also became popular in Middle Eastern countries, such as Iran. With the exports of Korean dramas, Kpop music sprung up.
The Korean government took full advantage of such culture phenomenon and utilize its media industries to expand exports of Korean dramas and pop music. This expansion has greatly contributed to South Korea’s economy.
Korean wave seems to have entered a golden age. Such culture phenomenon not only benefits to tourism and exports of related products, but also help improve Korea’s national image. Korean governments are spending a lot of money in developing such business. In 2013, the South Korean government budget related to Korean Wave increased by 27.3%, equivalent to $68.7 million. Thanks to Korean Wave, improved national image leads to increasing exports, and therefore leads to the growth of manufacturing industry.
Hallyu definitely has positive influences on the economy of South Korea. According to analysis conducted by Hyuandai Research Institute, when exports of culture products increase by 1%, exports of all consumer goods increase by 0.03%. Economic effects of Korean Wave-related business, including production, added value and employment, reach $4.87 billion per year.
When it comes to China, it is reported that the Korean Wave started in China sometime around 1997 when the drama What is Love All About provoked great reactions among Chinese audience after its broadcast. Since then, Korean television dramas have taken airtime on television channels with faster and faster speed. With the development of Internet, more and more Korean drama resources could be watched online. Because of high popularity, Chinese video websites give a long price for popular Korean dramas. More and more people in China are willing to pay the copyright.
Korean stars have made a big impact on the consumer culture, including food, fashion, make-up trends and even plastic surgery. Overseas fans travel to Korea to buy those products. The economic effect of the Hallyu was estimated to be $11.6 billion in 2014, an analysis by Korea Trade-investment Promotion Agency and the Korea Foundation for International Culture Exchange. And the cosmetics industry enjoyed the biggest growth, increase by 57%, as tourist from other countries vising Korea boosted sales. Tourism also left positive effect on employment since the industry created 24,520 jobs.
There is no doubt that Hallyu greatly stimulate exports. Exports of culture content and consumer goods increased by 8.4% in 2014, which was $6.16 billion. The increase is 2.3% higher than the country’s total export growth in 2013, indicating that Korean Wave led in overall exports.
As Hallyu moves towards the future, it will have a greater role in South Korea’s economy.