'The Power of BTS and Seungriho'... South Korea's Record High $850 Million Trade Surplus in Intellectual Property Rights in the First Half of the Year

Bank of Korea 2021 First Half Intellectual Property Trade Balance (Provisional)

BTS (Bangtan Sonyeondan) [Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] Thanks to the strong export performance of Hallyu, including BTS, South Korea's intellectual property (IP) trade surplus surpassed 800 million dollars in the first half of this year, marking an all-time high. The success of BTS and others has been analyzed to have led to an improvement in the overall IP trade balance, driven by a positive trend in the copyright trade balance, including cultural and artistic copyrights.

According to the Bank of Korea on the 24th, the provisional IP trade surplus in the first half of 2021 was 850 million dollars. This marks a turnaround from a deficit of 760 million dollars in the first half of last year. The surplus in the first half of this year is the second highest surplus on a half-year basis since the 350 million dollar surplus in the second half of 2019, and it is the largest surplus ever recorded.

Typically, South Korea's IP trade is structured to incur deficits because domestic companies use many patents and utility model rights held by countries such as the United States in the manufacturing process of electrical and electronic products like mobile phones. However, recently, the Bank of Korea explained that the overall IP trade balance has improved as the copyright balance has continued to show a surplus.

By type, copyrights recorded an all-time high surplus of 1.96 billion dollars. Industrial property rights recorded a deficit of 1.37 billion dollars.

Copyrights achieved the largest half-year surplus ever, with research and development and software (SW) copyrights at a surplus of 1.67 billion dollars, and cultural and artistic copyrights at 300 million dollars. Among cultural and artistic copyrights, the music and video sectors recorded a surplus of 310 million dollars, the largest on a half-year basis.

The Bank of Korea explained, "Exports of Hallyu content from domestic entertainment companies such as BTS and the movie Seungriho, as well as drama and film production companies, have increased."

Among industrial property rights, patents and utility model rights recorded a deficit of 940 million dollars, and trademarks and franchise rights recorded a deficit of 480 million dollars. However, the deficit narrowed as the export growth rate (+32.7% year-on-year) significantly outpaced imports (+11.4%).

Breaking down the trade balance by institution type, large domestic companies posted a surplus of 1.87 billion dollars, supported by increased database exports. In contrast, small and medium-sized domestic companies turned to a deficit of 20 million dollars. Foreign-invested small and medium-sized companies reduced their deficit to 1.01 billion dollars. By industry, manufacturing recorded a surplus of 1.09 billion dollars, while the service sector recorded a deficit of 190 million dollars.

By trading partner country, surpluses were recorded with China (1.14 billion dollars) and Vietnam (970 million dollars). The trade with the United States resulted in a deficit of 1.47 billion dollars.

This content was produced with the assistance of AI translation services.