The Economist Asia Edition

Anthony Albanese, the prime minister of Australia, and Rishi Sunak, the prime minister of Britain, met Joe Biden, the American president, in San Diego to announce the next stage of the three countries’ AUKUS defence pact. In a landmark agreement, Britain is to help design and build a new type of submarine for Australia, and America will sell nuclear-powered submarines to Australia in the 2030s. The deal expands the involvement of Britain and Australia in policing the Indo-Pacific. China said the AUKUS countries were travelling down “a dangerous road”. Mr Albanese then went to Fiji to assure it and other South Pacific countries that the AUKUS deal does not mean Australia is abandoning its commitment to nuclear nonproliferation. His visit comes as China renews its push for a security pact…

The failure of Silicon Valley Bank, a mid-sized American lender, sent shock waves through the financial system. SVB specialised in offering banking services to tech startups. It got into trouble as interest rates rose, the value of its bond-holdings plunged and nervy depositors took out their money. An attempt to raise capital to plug a shortfall in its finances failed, leading to a run on its deposits and the collapse of its share price. On March 13th HSBC purchased SVB’s British assets for £1, but America’s regulators have struggled to find a buyer for the rest of the bank. Two days after SVB imploded regulators took control of Signature Bank, which is based in New York. The speed and the size of the failures rattled markets, wiping billions off banking…

ONLY TEN days ago you might have thought that the banks had been fixed after the nightmare of the financial crisis in 2007-09. Now it is clear that they still have the power to cause a heart-stopping scare. A ferocious run at Silicon Valley Bank on March 9th saw $42bn in deposits flee in a day. SVB was just one of three American lenders to collapse in the space of a week. Regulators worked frantically over the weekend to devise a rescue. Even so, customers are asking once again if their money is safe. Investors have taken fright. Fully $229bn has been wiped off the market value of America’s banks so far this month, a fall of 17%. Treasury yields have tumbled and markets now reckon the Federal Reserve will…

THIS SHOULD have been Israel’s moment. As it approaches its 75th birthday in April the risk of a conventional war with neighbouring Arab states, for decades an existential danger, is at its lowest since 1948. The last Palestinian intifada, or uprising against occupation, ended 18 years ago. Israel’s tech-powered economy is more successful and globally relevant than ever. Last year GDP per person hit $55,000, making it richer than the EU. Yet instead of celebrations, Israel faces a crisis. Judicial reforms proposed by the right-wing coalition government would undermine the rule of law and weaken Israeli democracy. The prime minister, Binyamin Netanyahu, who has led Israel for 15 of the past 27 years, prides himself on making ruthless, often ugly, trade-offs that ultimately leave Israel stronger. Now he risks squandering…

PEOPLE SPOUT all sorts of nonsense to get themselves elected. Most of the time it does not matter, because memories fade and circumstances change. This week, however, Ron DeSantis, the governor of Florida and the most plausible challenger to Donald Trump for the Republican presidential nomination, declared that Ukraine is not one of America’s “vital national interests”. He was not only wrong, but his words have done lasting damage to Ukraine, America’s allies and America itself. Mr DeSantis was not speaking off the cuff, but in a prepared answer to a questionnaire put out by Tucker Carlson, a host on Fox News. Describing the war as a “territorial dispute”, he argued that America should not become further entangled in Ukraine when it faces so many other tasks, including countering China…

AUSTRALIAN AND British sailors have been visiting American submarines for decades. It would be hard to imagine closer allies than their three countries. But as those sailors approached the engine room they would come to a watertight door that even they could not pass. For beyond it lay one of America’s most sacrosanct technologies, shared only with Britain in 1958: nuclear propulsion. The AUKUS pact throws that door open, pointing the way to a new phase in the West’s competition with China. Under the plans announced on March 13th by Anthony Albanese, Joe Biden and Rishi Sunak, the leaders of Australia, America and Britain, Britain will co-design and build a next-generation submarine with Australia (see Asia section). To bridge the gap until the first boat arrives in the 2040s, America…