K-pop eyes China market as Lee's election raises hopes for end of hallyu ban
WayV, SM Entertainment’s China-based group. Courtesy of SM Entertainment
President Lee Jae-myung’s pledge to boost Korea’s cultural industry has sparked renewed optimism in the K-pop sector, with many seeing it as a possible signal that the long-standing "hanhanryeong" — China’s unofficial ban on Korean entertainment, or hallyu — may soon be lifted.
“K-culture is economy and national competitiveness. I will further grow Korea’s cultural industry,” Lee said during his inauguration speech on Wednesday, promising to make Korea a country where culture thrives.
By emphasizing culture as a driver of economic growth and international competitiveness, Lee’s remarks, combined with his focus on pragmatic diplomacy, have raised expectations of improved Seoul-Beijing ties, potentially reopening a Chinese market that has remained largely closed to K-pop since 2016 under the hallyu ban.
China-facing strategies
Some K-pop agencies have already begun preparing. On April 2, HYBE established a local subsidiary, HYBE China, in Beijing — its fourth overseas branch following those in Japan, the U.S. and Latin America.
While HYBE said that it currently has no immediate plans to launch a local idol group or audition program, industry watchers widely see the move as a preemptive step ahead of a possible thaw in cultural restrictions.
Due to hallyu ban, K-pop concerts have been funneled into alternative regions like Hong Kong and Macau.
According to the Korea Creative Content Agency's Shenzhen office, 29 K-pop concerts and fan meetings were held in Hong Kong last year, and 15 in Macau. For instance, boy band Tomorrow X Together (TXT) recently performed at Galaxy Arena in Macau.
Boy band Tomorrow X Together (TXT) performs at Galaxy Arena in Macau last month. Courtesy of BigHit Music
Tencent increases stake in SM
Collaboration between Korean and Chinese entertainment companies is also on the rise.
Tencent Music Entertainment (TME), a subsidiary of China’s top-valued tech company Tencent, recently acquired a 9.38 percent stake in SM Entertainment, making it the second-largest shareholder after Kakao and Kakao Entertainment (41.5 percent combined).
The two companies plan to jointly train and debut Chinese idol groups, with SM leading production and TME handling promotion and distribution in China.
According to Mirae Asset Securities, Greater China accounted for just 6 percent of SM’s total revenue last year — less than half of the 14 percent generated from Japan.
However, with TME’s support, analysts expect that figure to rise significantly. TME currently operates major Chinese music platforms such as QQ Music and Kugou Music, covering over 60 percent of the local digital music market.
While some in the industry voice concerns about expanding Chinese investment in Korean entertainment, others see it as a necessary opportunity.
Past experiences, such as Fantagio’s management disputes following Chinese investment, have made agencies cautious.
Still, TME’s involvement is seen as relatively stable — the company also holds smaller stakes in Kakao (5.95 percent), Kakao Entertainment (4.61 percent), and YG Entertainment (4.3 percent).
“Since TME holds less than 10 percent of SM, it’s unlikely they’ll be involved in management anytime soon. But future stake increases should be monitored. If we can collaborate with trustworthy Chinese firms like TME, we can minimize risk and unlock new growth in China," a K-pop agency executive said.
A large Tencent logo stands in front of the company’s headquarters in Shenzhen, Guangdong Province, China. AFP-Yonhap
Concert offers return, and investment outlook shifts
Signs of warming ties are already visible. “Lately we’ve received a sharp increase in concert inquiries from Chinese organizers," another industry insider noted.
While there are still restrictions — like limiting lineups to non-Korean members — it seems like the industry is preparing for a gradual lifting of the ban.”
Some experts predict that China’s role will shift from a passive investor to a more strategic partner.
Kim Ki-hyun, head of the Korea Creative Content Agency’s Beijing business center, said, “We expect Chinese investment in Korean content to evolve beyond simply acquiring intellectual property for domestic distribution. It could expand into co-investment, co-production and revenue-sharing models, even targeting global markets beyond China.”
As Lee Jae-myung’s administration signals a possible reset in diplomacy and cultural ties, the K-pop industry is watching closely, with one eye on opportunity, and the other on caution.
This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI and edited by The Korea Times.