■ The analysis suggests that a decrease in China’s construction sector output significantly impacts Korea’s GDP through reduced exports of intermediate goods to China. - A 10% decline in China’s construction production is projected to result in a 0.4% reduction in Korea’s GDP. - Industries closely related to the production and transportation of construction materials, such as chemicals, mining, shipping, and metal and non-metal product manufacturing, are particularly affected by the contraction in China’s construction sector. ■ The international division of labor between Korea and China is eroding in tandem with China’s growing competitiveness in intermediate goods production, indicating heightened competition in overseas markets for intermediate goods. - The share of Korean exports to China intended for re-export to third countries after processing is shrinking, while exports catering to China’s domestic demand are increasing. - In Vietnam’s intermediate goods market, where Korean companies are actively expanding as an alternative to the Chinese market, the increasing market share of Chinese products implies a relative decline in Korea’s competitive position. ■ While devising immediate and clear short-term measures to respond to the evolving international division of labor with China may be challenging, it is necessary to consistently pursue risk diversification strategies, such as the expansion of export and investment markets. - Corporate expansion into rapidly growing emerging markets in Southeast Asia and India, as well as into the Middle East and Eastern Europe, should be actively supported through government networks (e.g., KOTRA). - Anticipating China’s shift from an investment-led to a consumption-led demand structure as its overinvestment is calibrated, sustained efforts to enter and tap into the Chinese consumer market are also crucial. ■ Concurrently, the drive for economic structural reforms to enhance Korea’s international competitiveness should continue. - To smoothly navigate internal and external changes, it is imperative to enhance the flexibility of the Korean economy. · A rigid economy is vulnerable to adverse spillover from shocks, whereas a flexible economy can absorb and adapt to such disruptions. - Ultimately, the positive outcomes of market diversification hinge on securing corporate competitiveness. Therefore, maintaining ongoing efforts to invigorate economic vitality through structural reforms is necessary, including easing market entry barriers, increasing labor market flexibility, and overhauling the education system.

■ The upward trend in the labor force participation rate among women in their 30s is closely linked to the declining proportion of women with children within this age bracket. ■ Currently, the reduction in the number of women in their 30s with children is mitigating the slowdown in labor supply. However, over time, it could result in a shrinking working-age population and labor force, exacerbating economic and societal challenges. - Over the next five years (2024-2028), anticipated demographic changes, including a declining working-age population and aging, are forecasted to reduce the number of employed individuals by 30,000 to 40,000 annually. On the other hand, the rising labor force participation rate among women in their 30s is expected to bolster the employment numbers by approximately 40,000 each year, counteracting the effects of these demographic shifts. - However, the economic participation of women in their 30s is on the rise coinciding with a deepening trend of low birth rates (the total fertility rate declining to 0.7 in the second quarter of 2023). In the long run, this poses alarming concerns regarding economic slowdown, pension fund stability, and deteriorating fiscal health for the government. ■ To address the observed trends and challenges, sustained policy support for work-family balance is essential to simultaneously boost both the labor force participation and birth rate of women during their childbirth and child-rearing years. - While there appear to be considerable advancements in conditions that support the economic activities of women with children, child-rearing remains a chief deterrent to women’s workforce participation. - It is essential to further develop and widely promote measures that support work-family balance, including options for reduced work hours during child-rearing phases and flexible work arrangements, alongside fostering a more universally family-friendly workplace culture. - In addition, it is vital to strengthen economic self-sufficiency and accelerate the transition to family life for younger adults by enhancing their engagement in economic activities, which requires creating high-quality job opportunities to improve their current employment rates that lag behind those of major economies.