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Good morning. Australia plans to build its biggest navy since the second world war as it adapts to China’s military build-up in the Pacific region.
Canberra is to more than double the size of its naval fleet with an extra A$11.1bn ($7.2bn) of investment. The navy will expand to field 26 warships, including 11 new frigates and six new large vessels with long-range missile capability.
The plan eases fears within the defence community that the government would not meet promises to provide extra funding to upgrade the fleet after a review last year deemed it not fit for purpose.
The naval overhaul comes a year after Australia’s Defence Spending Review unveiled the biggest strategic shift in its military posture in almost 80 years, arguing that intense China-US competition had become the defining feature of the Pacific region.
It cited China’s military build-up as the “largest and most ambitious of any country since the end of the second world war”.
Nic Fildes reports from Sydney on the planned upgrade, plus why one security expert said China might not be concerned by Australia’s overhaul.
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More Australia news: BHP said the Australian government’s intervention to save the country’s nickel industry “may not be enough” as a write-off in the value of its nickel operations drove a near 90 per cent drop in first-half net profit.
Here’s what else I’m keeping tabs on today:
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Economic data: Japan publishes January trade balance figures, while the EU releases consumer confidence figures.
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Monetary policy: Indonesia makes a decision on interest rates.
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Diplomacy: The two-day G20 foreign ministers meeting opens in Rio de Janeiro, Brazil.
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Results: Glencore, Rio Tinto, HSBC, Hang Seng Bank, National Australia Bank and Nvidia are among those reporting.
Five more top stories
1. China has made a record cut to a mortgage-linked loan rate as policymakers roll out more targeted support to the country’s ailing property sector. The cut to the benchmark five-year loan prime rate, which is set by a group of big Chinese banks, suggests policymakers are concerned that home purchases have not rebounded.
2. Exclusive: Donald Trump entered the 2024 election year with about 200,000 fewer donors than in the previous presidential campaign four years ago, raising questions about his fundraising machine just as legal bills eat into his war chest. Here’s our analysis of the latest donor data.
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Related: Joe Biden raised more than $42mn in January, giving him a record-breaking $130mn war chest ahead of the November US presidential election.
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US Election Countdown newsletter: Join the FT’s Washington reporter Steff Chávez for your essential guide to the twists and turns of the most significant election in decades. Sign up here.
3. Russia has arrested a US-Russian dual citizen on treason charges for allegedly raising funds on behalf of Ukraine’s army. The woman, identified by a lawyers’ collective as Ksenia Khavana, was first arrested in late January outside a cinema in Ekaterinburg on charges of violating public order and sentenced to 14 days in detention, before being charged with treason this month. Moscow has arrested several US citizens in recent years and exchanged some of them for valuable Russians in western custody. Here’s more on the latest detention.
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More Russia news: A high-profile Russian helicopter pilot who defected to Ukraine in 2023 was found dead in Spain last week, according to Ukraine’s military intelligence.
4. Barclays has pledged to return £10bn to shareholders over the next three years as part of an ambitious plan by chief executive CS Venkatakrishnan to boost revenues and rebalance the lender away from investment banking. In a series of changes set out alongside the bank’s full-year earnings yesterday, Barclays also said it would shake up its corporate structure and top leadership.
5. Billionaire Michael Dell’s investment vehicle has agreed to back two former senior Goldman Sachs executives who are launching a private credit investment firm. Dell’s family office, known as DFO Management, will take a passive stake in 5C Investment Partners, according to people briefed on the matter. 5C’s first fund plans to provide senior loans to mid-sized and large businesses.
News in-depth
China’s state-owned enterprises have begun setting up in-house reserve military units, in a sign of authorities’ increasing concern about social and political instability amid the country’s economic slowdown, according to analysts. An FT analysis of company announcements and state media reports shows that dozens of Chinese SOEs have established People’s Armed Forces departments, a legacy of the Mao Zedong era, in recent months.
We’re also reading . . .
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The making of Xi’s China: FT Global China editor James Kynge reviews two new books that shine a vital light on the thinking behind the superpower.
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Interest rates: A hawkish tone from Australia’s central bank — and from New Zealand — signals that movement could still be up not down, writes Katie Martin.
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Navalny’s widow: After two decades of shunning the political spotlight, Yulia Navalnaya has vowed to take on her late husband’s struggle against Vladimir Putin.
Chart of the day
Bad commercial real estate loans have overtaken loss reserves at the biggest US banks after a sharp increase in late payments linked to offices, shopping centres and other properties.
Take a break from the news
It is the perfect Austrian ski resort. With its picture-postcard setting, plentiful high-altitude snow and a location close to the Grossglockner, the highest mountain in the country, Heiligenblut should be thriving. So why is it fighting for survival?
Additional contributions from Tee Zhuo and Gordon Smith
