"Thanks to Squid Game and BTS"... Record High Surplus in Cultural Arts Copyright Trade Balance

Bank of Korea Announces 2021 Intellectual Property Trade Balance

[Asia Economy Reporter Seo So-jung] As Korean dramas and K-pop, such as Squid Game and BTS, create a sensation, the cultural and artistic copyright trade balance achieved the largest surplus ever last year. The surplus in cultural and artistic copyrights, research and development, and software (SW) copyrights expanded, while the deficit in industrial property rights decreased, resulting in the intellectual property trade balance recording the smallest deficit since statistics began in 2010.

According to the '2021 Intellectual Property Trade Balance (Provisional)' announced by the Bank of Korea on the 25th, the cultural and artistic copyright trade balance posted a surplus of $750 million last year, marking the largest annual surplus. In 2020, the cultural and artistic copyright trade balance recorded its first surplus of $170 million, so the surplus has expanded significantly.

The music and video trade balance posted a surplus of $790 million, achieving the largest surplus ever. With the continued Korean Wave, exports of music and video copyrights by domestic entertainment companies such as BTS increased.

Park Chang-hyun, head of the International Balance of Payments Team at the Bank of Korea’s Economic Statistics Bureau, explained, "Last year, BTS’s sales continued, and following the success of Space Sweepers in the first half, hits such as DP, Hometown Cha-Cha-Cha, Squid Game, and Hell in the second half led the cultural and artistic copyright trade balance to record the largest surplus ever. Due to the expanded surplus in research and development and SW copyrights, the intellectual property trade balance deficit last year was $30 million, the smallest ever."

However, the trademark trade balance recorded a deficit of $1.61 billion, the largest deficit ever. Park said, "There were many deficits arising from transactions between domestic subsidiaries of global companies and their overseas headquarters related to trademarks. This was influenced by increased trademark imports by IT and food franchise companies."

By institution type, the trade balance of domestic large corporations recorded the largest surplus ever at $3.56 billion. Park said, "When electrical and electronic manufacturers produce smartphones, applications are often pre-installed, and the intellectual property fees received at that time are recorded as database exports, expanding the surplus. The increase in exports of patents, utility models, and franchise rights by automobile manufacturers also contributed to the surplus expansion."

By industry, the electrical and electronic product manufacturing industry ($820 million) posted a surplus for the first time, and the automobile and trailer industry ($1.17 billion) recorded the largest surplus ever. The information and communication industry (-$400 million) showed a deficit, but the deficit narrowed.

By trading partner country, the United States (-$3.03 billion) had the largest deficit, while China ($2.58 billion) and Vietnam ($1.92 billion) recorded surpluses.