South Korea has entered a "population emergency", and the number of "one person, one household, one pet" households has surged

South Korea's population issue has recently attracted renewed attention. In late June, South Korean President Yoon Suk-yeol officially declared a "state of population emergency" in South Korea at the "2024 Meeting of the Committee for a Low-Birthing and Aging Society," Xinhua news agency reported. Yoon stressed that if the trend of low fertility and aging is not reversed, South Korea's population may eventually become extinct. He said that he will start operating a nationwide response system until the problem of low fertility is resolved.

Statistics from the South Korean government at the beginning of the year show that in the whole of 2023, the number of births in South Korea will be only about 235,000, a record low. Compared to 2021 and 2022, South Korea's births in 2023 will drop by 11% and 8%, respectively. As of December 2023, the total population of South Korea is about 51.325 million, a year-on-year decrease of about 113,700.

In fact, in recent years, the alarm about South Korea's "aging and declining birthrate" has been sounding. Some institutions have even said that if Asia's fourth-largest economy cannot reverse this trend, then South Korea will face an aging population faster than Japan, the "world's oldest" country.

South Korea's central bank, the Bank of Korea, warned in a report released last year that South Korea's economy will fall into negative growth in 2050 if it does not take effective measures to boost its sluggish fertility rate.

The number of single-person households has surged

The Demographic Outlook, compiled by Statistics Korea and updated every two years, shows that South Korea's population peaked at about 51.84 million in 2020 and has since begun to show negative population growth, with the number of deaths exceeding the number of births each year. The outlook projects that the number of newborns in South Korea is expected to fall to about 220,000 by 2025 and further to about 160,000 by 2072. At the same time, South Korea's population is aging at an accelerated pace, with the share of people aged 65 and over expected to soar to 47.7% of the total population in 2072.

The total fertility rate is the most intuitive measure of a country's population change. According to the United Nations Population Fund's annual statistics, South Korea's total fertility rate in 2022 was 0.87, ranking first for three consecutive years. Typically, in the absence of immigration, a total fertility rate of at least 2.1 is required to maintain a generational replacement level. Statistics Korea data is even less objective. According to the agency, South Korea's total fertility rate in 2023 is only 0.72.

What changes has the declining fertility rate brought to South Korean society?

According to statistics from the Republic of Korea, the number of first-grade elementary school students in South Korea may be less than 400,000 in 2024, the lowest since records began.

The low fertility rate has also taken a toll on South Korea's traditional family structure. In South Korea, the number of single-person households is surging, and the lively scenes of "four generations in the same house" in the old Korean dramas are becoming less and less. Statistics from the Ministry of Public Administration and Security also show that as of December 2023, the total number of registered households in South Korea was about 23.915 million, an increase of 0.9% year-on-year. Among them, the number of single-person households approached 10 million, reaching 9.94 million, an increase of about 210,000 from a year ago, and became the main reason for the increase in the total number of households in South Korea.

The number of two-person households increased by 120,000 to 5,866,100 in the same period, while the number of three-person households increased by only 20,000 to 4.03 million in the same period, while the number of four-person and five-person households showed a downward trend.

Huang Fei, director professor of Seoul National Graduate School of Science, told the first financial reporter that according to her observation in South Korea for more than 20 years, there were many Korean families of three or four in the past, and young people at that time would follow the tradition to choose marriage and childbearing, but now young people's concept of marriage and childbearing has changed, and there are more young people who are unwilling to have children and are willing to keep pets.

"Nowadays, real estate developers in South Korea are taking advantage of the trend, such as launching small single apartments or pet apartments with only pet residents on the whole floor." Huang Fei said, "Recently, some of the government's youth apartments have even reduced or eliminated the size of the kitchen altogether, because convenience store meals are now very popular with single-person households. You can feel that this era is also creating a friendly and convenient atmosphere for single-person families. ”

Recently, data from various sources show that the size of South Korea's pet market is rapidly surpassing the baby market in the fields of food, trolleys, medical care and other products and services, affected by the decline in the birth rate and the increase in pet families.

In the first five months of this year, 69% of sales of pet food and human infant formula in the South Korean market came from pet goods, according to data from South Korean e-commerce platform Gmarket. In the first three quarters of 2023, 43% of the strollers sold by the e-commerce platform Gmarket were strollers, and 57% were pet strollers mainly designed for cats and dogs. This is the first time that pet stroller sales in South Korea have surpassed stroller sales.

Industry insiders expect that the trend of South Korea's pet care market surpassing the baby care market will become more obvious in the next few years, and the size of South Korea's pet market will grow to 6 trillion won (about 31.56 billion yuan) in 2027.

How the Yoon Suk-yeol administration will respond

Looking back at history, in the early 1960s, South Korea's total fertility rate once exceeded 5. As South Korea's economy took off in the 60s and 80s, South Korea's fertility rate declined rapidly, and by 1990, the total fertility rate had fallen to 1.6.

In the first half of the 90s, there was a debate in South Korea about whether population control should continue. Those who support the adjustment of the population policy argue that a further decline in fertility will have a serious negative socio-economic impact, and that the relaxation of the population policy will not lead to population expansion. Opponents of the population policy should insist that the policy of population control should be adhered to given South Korea's limited natural resources and extremely high population density. Otherwise, the fertility rate will rebound, and the achievements of family planning work for many years will be wiped out.

Under these circumstances, in 1995 the Korean Government established a Population Policy Review Committee composed of experts and high-level officials to conduct a study, and on the basis of extensive discussions, hearings and studies by the Committee, the Korean Government approved a change in the population policy in 1996, shifting the focus of the population policy from population quantity control to population quality and welfare, and preventing further decline in fertility levels.

However, after the policy adjustment, the total fertility rate of South Korea did not rise but declined, falling to about 1.2 in 2002~2004. In May 2005, the "Basic Law on Low Fertility and Population Aging" was passed and implemented, and the "Low Fertility and Population Aging Committee" was established directly under the president to implement policies to encourage childbirth.

After the implementation of the policy to encourage fertility, South Korea's fertility rate briefly rebounded, from 1.10 in 2006 to 1.26 in 2012, but since 2013, the fertility rate has been declining year by year, falling to 0.98 in 2018, falling below 1 for the first time, and hitting a new low of 0.72 in 2023.

However, data shows that since 2006, the South Korean government has invested a total of 380 trillion won ($289.8 billion) in policies aimed at addressing the birth crisis, but with little success.

At last week's meeting, Yoon Suk-yeol said that the name of the previously proposed "Ministry of Low Birth Planning" will be "Ministry of Population Strategic Planning," and that the top head of this department will also serve as vice prime minister and will be responsible for formulating medium- and long-term national development strategies on population issues, including dealing with low fertility rates, aging population, and formulating immigration policies.

Yoon also said that the government will focus its policy efforts on solving population issues in three core areas: balancing work and family, raising children, and housing. The government will further improve the childcare leave system to share the burden of childcare and reduce the burden on families raising children.

Of course, he also stressed that the solution to the population problem should not be limited to these three core areas, but also unswervingly promote structural reforms, including balanced regional development, employment, pensions, education, and health care.

(This article is from Yicai)