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BTS (provided by Big Hit Entertainment)

Korea has posted its first ever surplus in the balance of trade for culture and arts-related intellectual property (IP), buoyed by the current popularity of the K-pop group BTS and other Korean cultural exports.

According to the provisional IP trade balance for 2020 released by the Bank of Korea on Tuesday, Korea saw a US$160 million surplus in culture and arts-related IP trade, its first surplus since the bank began collecting statistics in 2010.

The surplus was driven by Korean entertainment companies’ growing exports of IP rights for music and videos. Declining imports of movies pushed up the surplus in the music and video sector to US$190 million. At the same time, IP rights for theater, art, and photography logged a deficit for the third year in a row.

“There’s been an increase in exports of webtoons, TV series produced by Studio Dragon, and BTS and other K-pop,” explained Park Chang-hyeon, head of the international balance of payments team at the Bank of Korea.

In the larger category of IP rights, Korea posted a deficit of US$1.87 billion, the biggest deficit since 2015 (US$4 billion).

During the COVID-19 pandemic, IP rights payments have increased as more people watch video content on their devices using apps operated by foreign companies such as Netflix and YouTube.

The IP categories driving the growth in the deficit relative to last year were industrial property rights, with a deficit of US$3.53 billion, and patents and utility model right, with a deficit of US$2.38 billion.

Even as Korea posted a surplus in culture and arts-related IP, it saw a decrease in its surplus in R&D and software IP, pulling down the sum of IP categories with a surplus to US$1.89 billion.

By industry, the service industry, including wholesale and retail, posted its highest ever deficit of US$1.32 billion. The manufacturing industry saw its deficit edge down to US$570 million.

In terms of major trading partners, Korea posted big deficits with the US ($3.84 billion), the UK (US$980 million), and Japan ($350 million) and surpluses with China (US$2.59 billion) and Vietnam (US$1.77 billion).

By Han Gwang-deok, finance correspondent

Please direct comments or questions to [english@hani.co.kr]