When Parasite director Bong Joon-ho got started on a story idea based on his twentysomething experiences as a tutor to Seoul’s super rich, doubtless ending up in the Oscar race for the best picture was not on his radar. No Korean film in history had even been nominated in the foreign language category, let alone for the biggest award of them all. But his uproarious but sorrowful class comedy about the Kims, a working-class Seoul family who infiltrate a well-to-do household by masquerading as private tutors and servants, became a stealth hit with US audiences. Before you knew it, he was on Jimmy Fallon, then skating through awards season, catching trophy after trophy. Now, with Oscars night looming, Bong’s film is up for honours in six categories, and, along with the much-fancied 1917, is considered a frontrunner for the top prize.

If Parasite wins best picture it will be overdue recognition for the creative hothouse that is South Korean cinema. In two decades, it has become pound-for-pound the most dynamic and original film industry on the planet, a home for muscular mainstream directors such as Bong and The Handmaiden director Park Chan-wook, but also festival-circuit favourites Hong Sang-soo, Kim Ki-duk and Burning director Lee Chang-dong.

Non-cinephiles probably first started becoming aware that something interesting was going on when Park’s Oldboy was released in the west in 2004. Its bone-crunching violence and dark plot put it in the “extreme Asian” cinema bracket that was already readily exportable. But Oldboy – and the other films in the director’s Vengeance trilogy – had more going on than that. They featured a peculiar blend of tones, absurdist comedy clattering straight into vaulting tragedy, that seemed uniquely Korean. Like protagonist Oh Dae-su, finally freed after 15 years of incarceration, cramming a fistful of live octopus into his gob.

This tonal pileup, visible in different measures in the work of many other directors, might be seen as a kind of reaction to the jarring upheavals of the country’s recent history. Oh Dae-su’s imprisonment spans from 1988, South Korea’s first full year of republican democracy, to 2003. In that time, the country had undergone a blazing entry into free-market capitalism, blotting out the preceding, darker period of military rule. Had South Korea, like Oh Dae-su, collectively experienced a blackout, a refusal to reckon with the meaning of these changes? The country’s film-makers have determined not to do the same; grappling with these social conditions arguably helped give birth to the country’s phenomenal cinema. They were also aided by a generous screen quota that, until 2006, required cinemas to show homegrown films for 146 days per year.

Smashing boundaries… Choi Min-sik as Oh Dae-su in Oldboy. Photograph: Allstar/UIP

The same conflicted outlook is visible at the start of Lee Chang-dong’s majestic 1999 feature Peppermint Candy. A suicidal businessman bellows wildly on a riverbank as his former friends ignore him and sing a nostalgic song – before the film goes backwards in time, through the boom years omitted by Oldboy, to discover what unhinged him.

Many Korean new wave (or hallyu) directors inhabit this zone of tonal overlap. The likes of Bong, Park and Kang Je-gyu (who directed thriller Shiri, the country’s first big domestic blockbuster) emerged from the period of 1980s civic turmoil that ended the military dictatorship. They were all members of the university cine-clubs that showed films banned under censorship laws, on campuses boiling over with pro-democracy fervour. Hence the taste for exploring off-limits parts of the national psyche, such as the resurgent South Korean industry’s obsession with the schism with the communist North, as seen in Park’s breakout film Joint Security Area, about a shooting in the demilitarised zone, Shiri, in which communist sleeper agents plant bombs in Seoul, and Kang’s Korean war blockbuster Taegukgi.

That obsession has now faded, but not the strain of pungent social commentary that is the Korean trademark, as US newcomers to Bong’s work are discovering. Memories of Murder, his 2003 masterpiece, used the great unsolved saga of the 1980s Hwaseong serial murders to indict dictatorship-era brutality and incompetence. Even his ostensibly popcorn creature feature The Host, from 2006, sneaks some in: it is an American scientist who dumps the chemicals in the Han river that create the film’s rampaging mutant catfish, surely a sly dig at the US military presence on the peninsula. With his English-language features Snowpiercer and Okja (which starred such western A-listers as Chris Evans, Tilda Swinton and Jake Gyllenhaal), he has worked within the belly of the hyper-capitalist US blockbuster beast, but always while poking it satirically from the inside. Other South Korean film-makers have explored the same themes: the feeling that US-style capitalism has poisoned the country can be gleaned from the likes of the 2011 animation King of Pigs, about brutal competition in schools, or Lee’s massively acclaimed Burning, from 2018, about an aspiring novelist’s frenemy relationship with a Gangnam playboy.

But it is also the same corporate ideology, and the strong commercial ethic it put in place, that has given South Korea a seemingly endless procession of masterful genre film-makers: from Bong and Park to Kim Jee-woon (the ultra-violent revenge thriller I Saw the Devil) to Yeon Sang-ho (Train to Busan, a zombie-carriage rampage with a class consciousness to rival Bong’s Snowpiercer) to the current new hope Na Hong-jin (the astonishing rural exorcism thriller The Wailing).

The secret is now out. Following the 2007 reduction in the screen quota, some of the original momentum has inevitably been lost. Bong and Park are now international players, with English-language suitors aplenty. But if Bong – after making two English-language features – had to go back to his native country to make the sharpest possible statement on inequality, winning big at the Oscars would be the ultimate vindication that audiences are prepared to follow. The local is the universal, after all. Or as Bong puts it: “We all live in the same country now: capitalism.”

Parasite is in cinemas from Friday 7 February