Korea's retail industry is pinning hopes on China's potential removal of a ban on Korean entertainment content, looking forward to a boost from Asia’s largest consumer market that could help compensate for sluggish domestic demand in recent years.
The Chinese government's move to ease restrictions on foreign companies has fueled expectations among Korean companies for a potential end to the "Korea limitation order" -- an unofficial policy implemented eight years ago by Chinese authorities that has impacted trade, tourism and the entertainment sector.
"We've seen that alongside K-content, everything it features -- such as K-food, fashion and makeup -- has been absorbed by foreign consumers, driving increased local spending," said a fashion industry official working in Seoul. "If the ban is lifted, it will trigger a chain reaction of consumption across a range of sectors. This trend would likely go viral, influencing tourists from one country to another."
China's state-run Xinhua News Agency reported on Thursday that the General Office of the State Council announced the foreign investment action plan for 2025, which experts see as a response to concerns over China's economic slowdown, driven by declining foreign investment.
The ban, imposed in 2017 following Korea’s deployment of the THAAD missile system, led to significant revenue losses for Korean companies heavily reliant on the Chinese market, forcing some to withdraw from it entirely.
Korean food companies also expect a direct boost in sales of K-food if the policy change is implemented.
"When cultural exchanges resume, food is the most natural way for people to connect. Lifting the ban could give another boost to K-food’s expanding global presence," a source in the domestic restaurant industry said.
The beauty industry is also largely optimistic, though some caution that any sales surge may not be immediate, given the rapid growth of domestic Chinese brands in recent years.
"During the years of the ban, Chinese consumers have developed strong preferences for their own brands, reinforced by the growth of their own 'C-commerce,' which has become a big name globally today," said an official from a leading cosmetics firm here. "For instance, there are already many cost-effective alternatives to K-beauty, often referred to as 'C-beauty,' so even if the ban is lifted, a dramatic increase in sales is unlikely in the short term."
As of 2023, China's cultural content market was valued at 13 trillion yuan ($1.8 trillion).
China is seen as focusing on a domestic economic recovery, while also strengthening relations with neighboring countries to counter potential trade pressure from the second Trump administration. China has recently taken a series of friendly measures toward other countries as well, including visa-free policies, border dispute management and a resumption of seafood imports with countries such as Japan and India.
Despite ongoing discussions, China's economic struggles and a global downturn make it unlikely that Chinese consumers will spend as freely as before, according to a duty-free industry official.
"With high inflation pushing up travel costs, K-culture alone may not be enough to drive strong consumer spending until China's economy stabilizes. Rather than anticipating immediate results, firms should adopt a steady and strategic approach," the official said.
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hykim@heraldcorp.com
