This story has become financial lore. In 1998, as South Korea teetered on the edge of bankruptcy during the Asian financial crisis, the government made an extraordinary appeal: citizens were asked to donate their gold jewellery to help the country repay its US$58 billion loan from the International Monetary Fund.

They donated some 226 tonnes of gold, worth an estimated US$2.2 billion — wedding bands, heirlooms, medals and trophies. The debt was cleared three years ahead of schedule.

Even as the country melted its gold into ingots, it was beginning to mint another sort of capital.

The reckoning raised a more hopeful question: what else could South Korea sell to the world?

The government of President Kim Dae-jung identified two possible engines of growth: information technology and culture. Both offered a route beyond heavy manufacturing. Popular culture, it believed, could generate exports while recasting Korea’s image after the crisis.

Looser censorship, greater emphasis on design and branding, and heavy investment in digital infrastructure and start-ups gave film, television and music companies room to grow. A new generation of creatives experimented and developed work that was raw, emotional, relatable and unapologetically local. The foundations of the Korean Wave were being laid.

The Making of Hallyu

The government quickly recognised that this nascent demand had the makings of a profitable industry.

From the late 1990s onwards, South Korea put institutional muscle behind its cultural businesses. Under the Hallyu Industry Support Development Plan, policymakers applied to culture the same export-oriented logic they had used to build industries such as electronics and automobiles.

The cultural-industry budget rose from US$14 million in 1998 to US$84 million in 2001. More than two decades later, that commitment has only deepened: the budget climbed to about US$5.35 billion for 2026.

That money built the institutional architecture for content to reach consumers. In 1998, the Ministry of Culture and Tourism was given an expanded mandate to develop talent, oversee infrastructure and promote Korean culture overseas. The Korea Creative Content Agency (KOCCA), established in 2009, added more systematic industry support. Today, 35 Korean Cultural Centres in 30 countries extend that network.

The payoff is visible in what we watch, hear, buy and visit: Winter Sonata, a romantic drama, helped spur Japanese tourism in the early 2000s; Psy’s Gangnam Style became the first YouTube video to reach one billion views; BTS made K-pop a global chart fixture; Parasite became the first non-English Best Picture winner at the Oscars; and Squid Game became Netflix’s most-watched series.

What This Means for Consumers

While the government does provide direct production funding and artist support, the strategic emphasis has been on building the ecosystem —digital infrastructure, export promotion, talent development, and seed capital — rather than relying solely on grant-making.

In June 2026 the Ministry and KOCCA unveiled the “Global Leap Forward Support” programme, a fund to help small and mid-sized K-pop agencies expand overseas. Ten fifth-generation K-pop acts, including RESCENE and 8TURN,  were selected. Their agencies will receive over US$200,000 annually for up to three years. The aim is to broaden the K-pop repertoire so that international fans have more acts to follow, more concerts to attend and more merchandise to buy.

The return on Hallyu’s nurturing is also tangible in the calibre of films and auteurs the system produces. The publicly funded Korean Academy of Film Arts, founded in 1984, has become a training ground for prolific filmmakers like Parasite’s Bong Joon-ho and Cannes favourite Im Sang-soo.

That track record proved that Hallyu was no fluke.

Engineering Soft Power

As Korean culture began to travel, it became a vehicle for reshaping perceptions of South Korea.

Successive administrations carried the Hallyu project forward. By 2010, it had shifted from an economic strategy to one of national branding and competitiveness. The Diplomatic White Paper described cultural diplomacy as “a new pillar of the country’s diplomatic make-up”.

That strategic turn was later codified in law. The Framework Act on the Promotion of the Hallyu Industry, enacted in October 2024 and in force since April 2025, treats the Korean Wave as a national strategic asset and puts in place the machinery to support it properly. It extends beyond entertainment to food, cosmetics and tourism, allowing products that benefit from Korea’s global popularity to fall within its ambit.

The political ambition continues to grow. Incumbent President Lee Jae Myung has announced support and investment aimed at making South Korea one of the world’s “big five soft powers”, with a target of growing the Hallyu market to US$36 billion by 2030.

Pop-culture stars have become informal ambassadors in this effort, even if the government cannot always control the narrative and use it to exert influence over complex geopolitical issues. In 2018, for example, the K-pop group Red Velvet performed in Pyongyang during a brief thaw in inter-Korean relations — illustrating both the appeal and the limits of cultural diplomacy. Artists can help open doors that official envoys cannot.

Culture Becomes Commerce

Hallyu can no longer be dismissed as a passing fad. Its economic importance is difficult to ignore. Korean Wave exports reached about US$19 billion in 2025, up 16 per cent from the previous year. Cosmetics exports reached US$11.4 billion, making South Korea the world’s second-largest cosmetics exporter after France.

These are different industries, but the spillover effect is precisely the point.

A recent study by KOCCA found that every US$100 million increase in K-content exports generated more than US$200 million in additional exports from Hallyu-related industries. The expansion of the South Korean health-and-beauty chain Olive Young into California this May shows this formula at work.

The formula for success is simple. Stories create affinity. Affinity builds trust. Trust encourages consumption. A viewer who begins with a drama may end up buying Korean skincare, learning the language or booking a flight to Seoul.

The Growing Reach of Other Cultural Content

Global platforms accelerated Hallyu’s dominance. Netflix announced in 2023 that it would invest US$2.5 billion in Korean content over four years, following hits such as Squid Game and Physical: 100.

Other countries are now trying to build their own cultural export machines. China, for example, has promoted Guochao, or “National Wave”, which combines Chinese heritage with contemporary brands and design, and more recently, with Chinese entertainment.

Pursuit of Jade, a period romance released simultaneously on Tencent Video, iQIYI and Netflix in early 2026, became the first Chinese costume drama to rank among Netflix’s most-watched non-English titles globally.

The commercial spillovers are familiar: Zhang Linghe, the series’ male lead, has become the face of cosmetics and skincare campaigns and travel agencies are packaging tours around the drama’s filming locations.

Yet South Korea retains structural advantages through decades of building institutions, financing creative businesses and deploying cultural diplomacy. That head start has given Hallyu a level of depth and coordination that newer cultural-export strategies have yet to match.

Closer to Home

For Singapore, the Hallyu story carries a particular resonance. This is a country that has practised its own version of patient, state-coordinated investment for decades. The underlying logic is similar: zero in on a strategic industry, invest ahead of demand and align the state, the private sector and the talent pipeline.

There is a broader lesson here. Hallyu did not succeed because South Korea made a few global hits. It worked because the country turned strengths into attractive propositions.

First, differentiate. Identify what you do unusually well and who outside your home market would value it. South Korea bet on pop culture when no other mid-sized economy treated entertainment as a serious export.

Second, pair technical competence with cultural fluency. K-pop agencies learnt local languages and tailored content market by market, while Korean dramas travelled globally by weaving universal themes of family, class and moral ambiguity into a distinctly Korean voice.

Lastly, think in ecosystems and play the long game. Korea connected public funding, training academies, streaming platforms and cultural diplomacy so that each win fed the next. The things that last, relationships, judgement, trust, are the things that take the longest to build.

Hallyu Offers the Answer

South Korea did not become culturally influential through slogans alone. It spent decades developing talent, institutions, infrastructure and distribution, while private companies learnt how to turn them into things people wanted.

In an age when almost everyone will have access to the same technology and much of the same information, the advantage may belong less to those who can merely produce an answer than to those who make people care who the answer comes from.