There are 'green shoots' coming from the world's economic 'canary in the coal mine'

South Korean exports are often referred to as the world's economic canary in the coal mine because of their exposure to the US (12.3%), China (25.4%) and Japan (5.6%) - the world's three largest economies.

In fact, 48% of South Korea's exports go to those countries if you consider Hong Kong (4.8%) as part of China, according to the CIA's World Factbook.

Recently, Wall Street has been rather gloomy about the prospects for the global economy.

And rightfully so as South Korean exports have fallen by double-digit percentage points over each of the last three months.

In fact, South Korea hasn't recorded year-over-year export growth since December 2014.

Andy Kiersz / Business Insider, Data from Bloomberg

However, HSBC is beginning to see some "green shoots" emerge as Chinese tourism picks up, and the Korean culture wave, or Hallyu, continues to "sweep the region."

The firm says, Chinese consumers are becoming increasingly interested in "Korean food, cosmetics, fashion, music and, more importantly, TV dramas."

In early December, the won was trading at around 9.50 per yen. Then, further deterioration in South Korean exports and the possibility the Bank of Japan would introduce negative interest rates caused the won to weaken to worse than 10.37 per yen.

Following some initial won strength after the Bank of Japan announced negative interest rates, the won's weakness continued, touching 11.00 per yen.

Andy Kiersz / Business Insider, Data from Bloomberg

The recent won weakness versus the yen has helped alleviate some of the pressure on South Korea's exporters.

Korea and Japan compete heavily for exports as both look to offload their automobiles, electronics and steel onto the rest of the world.

HSBC believes this development is likely good news as a weak won is usually positive for South Korean equities.

HSBC

HSBC economist Frederic Neumann believes South Korea's macro fundamentals are sound, and that the country's finances are in a lot better shape than most of the region.

"Talk of financial stress is overdone," Neumann wrote.

And that could be good news for the global economy.