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This is an audio transcript of the FT News Briefing podcast episode: The South Korean ‘wave’ has gone global

Marc Filippino
Good morning from the Financial Times. Today is Monday, October 25th, and this is your FT News Briefing.

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Poland has accused the EU of putting a gun to its head when it comes to funding and the rule of law. And Russian mercenaries are accused of committing atrocities in the Central African Republic. Plus, the hit series Squid Game is the latest splash from South Korea’s global wave of cultural exports, but its biggest fans have long been in Asia.

Ed White
Look at China, the face which gets the most requests to be copied for plastic surgery is that of Go Yoon Jung. She’s a 25-year-old South Korean actress.

Marc Filippino
China’s government isn’t a fan of South Korean entertainment these days. We’ll find out what that means for Korea’s culture industry. I’m Marc Filippino, and here’s the news you need to start your day.

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Poland’s prime minister has escalated the tensions between Warsaw and Brussels. The EU and Poland have been at odds over the rule of law, and the European Commission has threatened Poland with legal and financial sanctions. Poland’s prime minister Mateusz Morawiecki told the FT that withholding funds is unfair and that the EU was holding a gun to Poland’s head. He urged Brussels to withdraw its threats. Morawiecki warned that if the European Commission starts the third world war by withholding promised cash to Warsaw, Poland would defend its rights with any weapons that are at its disposal.

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Russian mercenaries surged into the Central African Republic at the end of last year. Locals initially welcomed them for pushing rebel insurgents out of the towns. Now, locals reported horrific stories of rape, torture and murder at the hands of these heavily tattooed Russian private soldiers who have been linked to the Kremlin. The FT’s West Africa correspondent Neil Munshi went to the CAR to find out more.

Neil Munshi
Russia maintains that they only have unarmed instructors in the country. But UN officials, foreign diplomats, security officials in the country, civilians, opposition figures and pretty much anyone else you could name say that in fact, the Russian fighters who are in the country, most of them are mercenaries from this network of companies called Wagner.

Marc Filippino
Neil, what’s the Wagner Group doing there? What are they hoping to accomplish?

Neil Munshi
So, according to analysts and others who know the group well as a sort of informal extension of the Kremlin, it allows Russia to, at very low cost both politically and monetarily, to kind of regain some of the global sphere of influence that they had during the Cold War. And they can do it with a level of plausible deniability because they don’t acknowledge, and the Central African government doesn’t acknowledge that there are any mercenaries there. And they can’t be held accountable for any of the alleged human rights violations or alleged possible war crimes that the UN Human Rights Council’s working group on mercenaries and others have accused the mercenaries of committing.

Marc Filippino
Has the government said anything in response to these mercenaries? Do they do they want them to stay or leave?

Neil Munshi
No, I mean, that’s the thing. The government, though they do not acknowledge that these mercenaries are there, there are no signs that they are disappointed with the Russian presence or that they have any plans to break off that relationship. And in fact, most people, if you talk to them from diplomats to the UN to security sources to civilians, would say that the government stands today and a lot of ways because of the Russian presence.

Marc Filippino
Neil Munshi is the FT’s West Africa correspondent.

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[‘PINK SOLDIERS’ FROM THE SQUID GAME SOUNDTRACK PLAYING]

Squid Game is Netflix’s biggest ever series launch. Not only that, the South Korean drama helped Netflix double the number of new subscribers over the past year. But Squid Game is only one small piece of South Korea’s massive pop culture export industry.

[‘GANGNAM STYLE’ BY PSY PLAYING]

The 2013 song “Gangnam Style” gave westerners a taste of what consumers in Asia had been feasting on for years.

[‘DYNAMITE’ BY BTS PLAYING]

There’s an enormous menu of K-pop bands, video games, TV dramas and movies. Just remember how big the film Parasite was. And now the industry’s worth more than $100bn a year. Here’s the FT’s Ed White.

Ed White
Clearly, the Korean production houses have landed on something of a recipe that really works. I mean, this is a mix of drama, aspiration, romance, intrigue, comedy and audiences are responding to this. For the music, the groups like BTS, many people see the success in this sort of versatility. They perform songs and dances that cross genres, pretty simple messages, all of that seems to have pretty broad appeal.

[‘HOW YOU LIKE THAT’ BY BLACKPINK PLAYING]

Ed White
When the Koreans have success, they are very, very good at replicating it. Now it appears that they found these recipes for success in gaming and film and TV and even in making music. And they’re starting to find new ways to produce them at a lower cost and at a scale that other people just don’t seem to be able to do. Now what this looks like in the real world is that as we speak, there are literally thousands and thousands of children, teenagers learning how to sing, how to dance, how to act. And they’re in basement studios across Seoul, training their hearts out to be the next BTS or the next BLACKPINK or the next big K-drama star. Seoul is also creating a sort of hub where it’s attracting a huge amount of talent from around Asia. So aspiring young actors and singers and dancers from Japan, Taiwan, China, South East Asia, they are all trying to get to Seoul to try and make it here. This is just the same as you’ve seen for years and years, with aspiring artists and actors going to Los Angeles or to Hollywood to try and make it in the US.

Marc Filippino
So bigger picture, Ed, how important are pop culture exports to the overall South Korean economy?

Ed White
Consider the context of South Korea as you know, it has water on three sides. It’s got the heavily guarded North Korean border to the North. It’s really essentially an island with fairly limited natural resources, so this industry is actually becoming really quite important. And it’s been taken quite seriously, not just by audiences, but by investors as well.

Marc Filippino
So, Ed, as you’ve reported, China and really Chinese consumers have been a huge part of the success of the Korean wave. Can you talk a little bit more about that?

Ed White
China has played a critical role for the development of the South Korean entertainment industry. The Chinese market accounts for actually more than half of the industry’s sales revenue, and that’s because some of the most popular games inside China have actually been developed by Korean companies. And then there have also been really quite successful partnerships between the Korean gaming companies and some of China’s biggest tech giants, like the likes of Tencent. There is also just a lot of spillover from the popularity of the Korean entertainment groups with Chinese consumers. And this has been important also for marketing and advertising opportunities for Korean companies generally. Korean car ads for instance, when Hyundai has traditionally advertised in China they’ll try and use a K-pop band like the likes of BTS, and that’s the same for Samsung’s electronics products and many, many other products as well.

Marc Filippino
So it occurs to me, Ed, that that this means that South Korean companies might be vulnerable to the current crackdown in China right now, right?

Ed White
Really, at the moment, we’re still sort of surveying the damage over the past couple of months. There’s just been this unparalleled effort by the government under Xi Jinping in China to address what they see as these social ills. And that encompasses tech, it encompasses gaming and also entertainment industries. And so those are all key industries for the South Koreans. Gaming developers are probably the worst hit so far, just from a monetary point of view. This isn’t just an impact from the crackdown on the number of hours that Chinese gamers are allowed to play online, particularly children. And it’s also the fact that the process for licensing new games has become basically glacial. It’s taken years and years, and so the opportunities for growth for these companies that have been successful traditionally, they are really starting to dwindle. And with this pressure, also, you’re starting to see basically the South Korean entertainment companies that have traded off that, the way that the Chinese customers recognise Korean brands, that has started to been impacted as well. So the advertising opportunities for Korean pop stars, they’re starting to slowly die off also in China. And then the other thing is, it’s just in general the you have the situation with the Chinese government and Chinese consumers really supporting more homegrown content and homegrown industries. And this is going to potentially be a much longer term impact, but one that will, it’s already starting to hurt the companies, the Korean companies, but I think it’s going to go for a long, a lot longer too.

Marc Filippino
Ed White reports on China and Korea for the Financial Times.

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Before we go, we have a weather forecast for you, courtesy of Fox News. Lachlan Murdoch has invested $10m in a bid to get Fox News to launch a 24-hour weather streaming app. Fox News is owned by Lachlan’s dad, Rupert. The move comes as cable news networks are losing audiences since Donald Trump left the White House. Now, some worry about Fox’s ability to report the weather accurately. Some of the network’s biggest on-air personalities have questioned the threat of global warming. One of them, Tucker Carlson, called the climate change threat a liberal invention.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.

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