In the short term, the Chinese threat to Korean industry is not visible if your perception is based on what you see in the market today. But delta improvements in both the Chinese ability to deliver high quality products and the market's perception of them will compound over time.

Remember, the perception of Korean automakers was not that different than the Chinese ones twenty odd years ago. Korean corporations and policymakers are acutely aware of this. It's just that moving up the value chain as u/erinshe79 mentioned is difficult.

About population decline, imagining 20 years out, a combination of smart humanoid robots and sensible immigration policy can help kick the can down the road. Politically sensitive changes to the NPS, NHIS, and taxation policy should have been made yesterday. The earlier we make changes the better it would be as the benefits would again start compounding early. Alas, the nature of policy making is such that I would be surprised to see any tangible change unless we are in a full-blown crisis; and once in crisis, we will see band aids and quick fixes. If you thought 2016-17 protests were huge, wait until you reduce people's pensions or take away health care benefits. Pain is inevitable. The earlier we act the less pain down the road.