The copyright for the earliest iteration of Mickey Mouse — you know the one, the black-and-white whistling fellow piloting a steamboat — officially lost its US copyright protection with the new year. That means Disney's most iconic mascot — albeit strictly the 1928 version — is now legally fair game, a new and potentially uncomfortable sensation for a company famous for the rigor with which it defends its intellectual property. Kind of a Goofy situation, when you think about it.
The storm that China has been weathering since 2020 doesn't look like it's letting up anytime in the next year.
In a New Year's Eve speech on Sunday, Chinese President Xi Jinping told Chinese citizens to be prepared for even further financial struggles. "On the path ahead, winds and rains are the norm," he said. His statements came shortly after Beijing published data that forecasts more economic weakness in 2024.
Brace Yourselves
Here at The Daily Upside, we've gone over many of the economic bubbles that seemingly burst in China during 2023: high youth unemployment, a tanking property sector, debt-ridden local governments, and diminished Western investment. In addition to those pitfalls, China also saw its manufacturing and services activity dip in the face of slow demand and consumer belt-tightening, according to surveys cited by The Wall Street Journal.
Another blow that's been building over the past few years has been the hit to its publicly traded internet companies, which have lost more than $1.2 trillion in market value since Beijing began sweeping regulatory crackdowns, the WSJreported. Some of the nation's biggest names on the net — Alibaba, Baidu, and Tencent — have seen their stock prices plummet by more than half from peaks in 2020 and 2021.
The International Monetary Fund expects China's economic growth to slow to 4.6% in 2024, from a projected 5.4% in 2023. In many cases, China's problems built slowly over time, and now, Xi and the rest of the Chinese Communist Party are prepared for a slow trek to recovery:
Despite the poor outlook, Xi insisted the country was heading in the right direction, touting progress in electric vehicle, battery, and solar panel production. He also referenced the C919 — the first Chinese-made passenger jet that made its commercial maiden flight in May — which could allow China to have a place in the Western-dominated aviation market.
China's citizens and businesses could benefit from stimulus packages, but Beijing is taking a cautious approach. Xi has mentioned his disdain for Western-style handouts and said stimulus will be focused on infrastructure and manufacturing centers.
Sabers Still Rattling: Xi also addressed Taiwan's upcoming presidential election. China claims sovereignty over Taiwan, but the island nation and many countries around the world disagree. Taiwan's presidential election is later this month, and the frontrunner is Democratic Progressive Lai Ching-te, whom the CCP sees as a separatist. "The reunification of the motherland is a historical inevitability," Xi said. China has been building up its military presence around Taiwan, and Beijing hasn't ruled out taking Taipei by force.
First it was Netflix. The scrappy DVD upstart transformed into a true media juggernaut using the power of the internet to circumnavigate the legacy cable model. They brought new meaning to the word "binge," and have become one of the largest producers of content on the globe.
But is Netflix starting to show cracks? Does content production scale in the same way Netflix's syndication model does?
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INDUSTRIES
Economic Slowdown Isn't Hurting Law Firm Bonuses
Maybe the advice and not-so-subtle urging of our parents (and grandparents, and aunts, and uncles, and college professors) was right: We should've gone to law school.
A slowdown in M&A activity meant Wall Street employees didn't necessarily have it easy in 2023. Nor did those in other professional services, like accounting. But lawyers, especially the clever bunch servicing the finance world, unsurprisingly took life's lemons and conjured up a lemonade spiked with plenty of billable hours. One tactic employed nearly industry-wide to counter the slowdown in dealmaking: increased billing rates. According to a recent Wells Fargo poll of 120 law firms, billing rates were up nearly 8%, an unprecedented rise.
That industry-specific instance of inflation fueled a very happy holiday season:
According to a source who spoke with the FT, Cravath — a law firm which typically sets salary standards for Wall Street's legal players — is increasing starting salaries in the New Year for new recruits by as much as $20,000. The firm also distributed bonuses worth between $15,000 and $105,000 this year.
The new payscale has been matched by firms including Boies Schiller Flexner, Simpson Thacher & Bartlett, and Paul Hastings, per the FT. That means most lawyers in the sector who graduated in 2023 are earning starting salaries of $225,000, while those just a few years older tend to make as much as $420,000.
Remote Detonated: Some lawyers, however, received a comparative lump of coal in their bonus stockings. In the ongoing war to return workers to expensive and fancy office space, a number of Manhattan firms — including Davis Polk and Simpson Thacher & Barlett — have tied bonus amounts to return-to-office policies, according to the FT. Sure, trading the cubicle for the couch is a lot more comfortable. But just think of how many couches you could buy with a six-figure bonus check.
Written by Brian Boyle
INTERNATIONAL ECONOMICS
Saudi Arabia Now Top Among Sovereign Wealth Fund Spenders
The minute you walked in the joint…
A report released Monday by data platform Global SWF showed sovereign wealth investment outlays in 2023 dropped 20% from the previous year. It also revealed there's a $31.6 billion gorilla in the room: Saudi Arabia's Public Investment Fund (PIF) represented a roughly 25% chunk of all sovereign wealth spending last year.
All in the Game
Saudi Arabia snatched the top spot from Singapore, which was previously the biggest spender among sovereign wealth funds for the last six years. But while Singapore spent almost 50% less than in 2022, Saudi Arabia's investment for 2023 ticked up 33%.
According to Global SWF's report, sovereign wealth funds overall invested the most in real estate, and the year saw a record level of investment in the green energy transition. Saudi Arabia specifically invested heavily in sports in 2023, prompting criticism of "sports-washing," i.e. trying to distract from their unsavory human rights records:
Saudi Arabia is embracing all manner of games, not just those that involve some kind of physical exertion. In April, the PIF announced it was consecrating $38 billion to break into the video game industry.
Saudi Arabia could find itself with outsized influence (even by its own outlandishly wealthy standards) in gaming, as overall investment in the sector has taken a massive nosedive since the height of the pandemic, and many games studios living off 2020-era investment will start running out of runway soon.
Swooping In: Saudi Arabia and other Gulf nations stepped up their investment in Southeast Asian startups last year, filling a funding vacuum left behind by China, the Financial Timesreported in December.
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Sabers Still Rattling: Xi also addressed Taiwan's upcoming presidential election. China claims sovereignty over Taiwan, but the island nation and many countries around the world disagree. Taiwan's presidential election is later this month, and the frontrunner is Democratic Progressive Lai Ching-te, whom the CCP sees as a separatist. "The reunification of the motherland is a historical inevitability," Xi said. China has been building up its military presence around Taiwan, and Beijing hasn't ruled out taking Taipei by force. 
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