China, trapped in a trade war with the United States and struggling with weak domestic consumption, seems to be turning around in an unlikely sector: K-pop.

On April 28, K-POP Group EPEX will perform in Fuji Fuzhou on May 31, the first concert held in mainland China by a general practice idol group in China since 2016.

The South Korean Entertainment Producers Association said that, most importantly, the large annual fantasy concert - South Korea's longest K-POP event - was reportedly scheduled to be held on September 26 at the 40,000-seat stadium in Hainan Province.

These developments may indicate that China's unofficial ban on the mainland after South Korea announced the deployment of air defense missile defense systems in high altitude areas in 2016, which China said was intended to limit China's power in the region, among other reasons.

Oh Jiwoo, a Hong Kong research analyst at CGS International Securities, said that the K-POP is about the "structural turning point" for the industry.

"This policy shift is part of China's broader strategy to restore domestic demand amid a long-term consumer recession," OH told CNBC.

She noted that China's GDP grew by nearly 70% in 2018, but its share has dropped below 30% in recent years, with the country's consumer price index growth hovering at zero and close to zero.

She added: “In response, the government has begun promoting cultural activities (including foreign pop concerts) to stimulate tourism, hospitality and discretionary spending for local businesses.”

On April 25, the Ministry of Culture and Tourism of China issued a notice requiring the promotion of cultural activities, including concerts and music festivals.

Ohio states that China is South Korea's third largest album export market after Japan and the United States and the second largest music market in Asia, "despite years of restrictions, it still emphasizes its strategic importance."

The case provided for K-POP in China is also a fact that the industry is seen as preventing tariffs.

Ji In-Hae of Shinhan Securities wrote in a record on April 14: "Although the market is very volatile due to tariffs, (entertainment and media) are not affected by tariffs at all, and the possibility of China opening up is valid."

CGS's Oh said: "The core revenue driver (core revenue driver) is digital and intangible, keeping it from cross-border tariffs." Even if fans buy albums and merchandise, tariff exposure can be "insignificant" given the lower unit price and loyal fan demand.

"Contrary to semiconductors or automobiles (global trade policies directly affect supply chains and pricing), K-POP consumption is far less sensitive to trade protectionist measures," she added. Semiconductors and automobiles are the two major exports of South Korea.

Last month, South Korea announced that it provided a $23 billion support package for its semiconductor industry in light of uncertainty surrounding U.S. tariffs. The Trump administration imposed a 25% tax on all vehicles shipped to the United States, while steel imports were levied 25%.

According to Carpro, South Korea's Hyundai and Kia are one of the top eight bestsellers in the United States. According to data from the U.S. Department of Commerce’s International Trade Administration, the country is also the fourth largest steel exporter in the United States in 2024.

But China's softening stance on K-POP has a diplomatic dimension, which goes beyond the desire to increase domestic consumption, analysts say.

Citi analysts John Wu and Alicia Yap pointed out on April 4 that China may try to restore ties with neighboring countries, including South Korea, given their own economic challenges.

Cultural diplomacy could be a key starting point, they say, leading to relaxation of informal bans on Korean content and restoration of K-Pop fan-driven revenue streams in the region. They are described as “(a) long-term beneficiaries of changing the world order.”

CGS’s Oh, responding to the point, telling CNBC, “Reintroduction of K-Pop can help diversify cultural products and promote regional goodwill.”

She added that China appears to be keeping in touch with South Korea while imposing temporary restrictions on certain Western content, including Hollywood movies.

Oh say that this shift not only restores opportunities for a previously restricted fan economy, but also provides opportunities for deepening Asian cultural engagement, which will lay the foundation for long-term structural growth in the region.

These developments may be good news for K-Pop stocks.

The revenue and share prices of K-Pop’s four companies (called the Big Four and all public lists) were beaten in 2024. Despite the many admiring fans, multi-city concerts and billions of YouTube streams are all seen worldwide.

However, the rebound appears to have occurred in the first few months of 2025, with three of the four major companies gradually increasing.

If the country lifts informal ban on South Korean artists, China's concert market will see a significant increase in 2025. CGS's Joshua Kim pointed out on February 10 that the size of the Chinese concert market increased from $2.9 billion in 2019 to $8 billion in 2024, an increase of 189% during that period.

"So if China lifts the ban on Korean artists, we expect China to account for more than 25% of concert revenue in 2025, exceeding its contribution in 2016," he said.

Morgan Stanley stock analyst Seyon Park said she believes China reopening is a "potentially powerful catalyst" that could be gradually opened, which could drive revenue and fair value estimates significantly higher, although reopening may be gradually opened.

OH believes that the approval of EPEX concerts is a “policy test case” that can pave the way for larger behaviors. She noted that in Shanghai, smaller fan activities of the women's group may indicate that China started with a medium-term action before gaining wider re-engagement.

Epex is a relatively rookie group in the industry that debuted in 2021, but oh, they say these are not isolated approvals, but a broader transition to high-capacity, high-visibility events.

“As HYBE, JYP, SM and YG have already positioned for global arena tours, we expect Korean institutions to quickly develop rapidly in monetizing demand once restrictions are restricted. These developments have exacerbated the multi-stage reopening scenario and provide a strong revenue catalysis for the Big Four’s money-making.”

Or quoting YG Entertainment’s 2NE1’s 2009 song, K-Pop told China: “It’s been a long time, but we’re here now.”