SK Group Chairman Chey Tae-won is calling for South Korea and Japan to build an economic community, arguing that deeper integration of their economies and labor markets could help both countries cope with shrinking populations and weakening growth prospects.
At an Aug. 30 symposium on declining birthrates, Chey said South Korea and Japan need to expand the size of their combined market as their populations contract. He said economic ties between the two countries should be strengthened to the level of an economic community.
Chey, who co-chairs a bilateral committee focused on addressing declining birthrates, said falling birthrates are reducing the two countries’ growth potential while increasing the social costs of supporting older populations and providing care.
Closer cooperation between the two labor markets could give younger people more opportunities to work across borders, Chey said. Allowing Korean and Japanese workers to move more freely between the two economies could expand employment opportunities while giving companies access to a larger labor pool.
The proposal comes as both countries face severe demographic pressures. South Korea has one of the world’s lowest birthrates, while Japan has experienced population aging and decline for decades.
A survey of young adults presented at the symposium showed significant differences in attitudes toward marriage. About 42.4% of unmarried young people in Japan said they had no intention of marrying, more than twice the 18.6% reported in South Korea.
South Korean young adults were more likely to say they were engaged or currently in a relationship. About 32.2% said they had a fiancé or romantic partner, compared with 21.4% in Japan.
Economic concerns were prominent in both countries. Employment and income were identified as the biggest sources of anxiety about the future by 43.1% of South Korean respondents, compared with 32.5% of Japanese respondents.
The survey suggests that the demographic problem extends beyond birthrates themselves. Job security, income prospects and attitudes toward marriage are influencing how young people view family formation.
Chey’s proposal would broaden the policy response by treating population decline as an economic challenge shared by both countries. A larger integrated market could help companies offset shrinking domestic demand, while greater labor mobility could ease some pressure from declining workforces.
For South Korea and Japan, the idea represents a shift from addressing demographic decline primarily through family policy toward using deeper economic integration as another tool to manage the consequences of a shrinking population.
