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A growing number of Chinese consumers are switching from Apple’s iPhone, Hong Kong paper says

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Customers look at products in an Apple store in Beijing on December 11, 2018.

Greg Baker | AFP | Getty Images

Huawei is winning over more and more Apple fans in China as the escalated trade tensions stoked “nationalist sentiment,” according to the South China Morning Post.

China’s consumers are increasingly favoring their domestic brands after the U.S. stepped up its action against Huawei, the paper said. The article cited a few anecdotes where people switched to Huawei smartphones from their beloved iPhones to show their support for the country and Chinese brands.

“It’s kind of embarrassing to pull an iPhone out of your pocket nowadays when all the company executives use Huawei,” Sam Li, who works at a state-owned telecom company in Beijing, told South China Morning Post. He added his company offers employees a Huawei discount.

The nationalist rhetoric has gotten louder in China after President Donald Trump blacklisted Huawei, effectively halting its ability to buy American-made parts and components. Comments like “support Huawei” and “hang in there” have become increasingly popular on Chinese social media platforms and some people said Google’s decision to cut ties with Huawei is like “cutting the ground from under one’s foot,” according to the Hong Kong-based newspaper.

Apple, a big player in China, is sitting in the crossfire of the tit-for-tat tariffs between the U.S. and China. Its China business accounted for more than 17% of its sales in its fiscal second quarter and the company sells billions of dollar worth in iPhones in China every year.

Now the anti-Apple sentiment in China is creating more headaches for the tech giant who is already suffering from the slowing iPhone demand. Shares of Apple has tumbled nearly 12% in the past month as trade tensions intensified. The U.S. hiked tariffs on $200 billions worth of Chinese goods earlier in May. China retaliated by raising duties on $60 billion worth of U.S. imports to as high as 25%.

Goldman Sachs said Wednesday if Apple’s products were banned in mainland China, its earnings could drop by 29%.

The trade worries has prompted many Wall Street analysts to cut their projections for Apple. HSBC cut its price target on the tech giant to $174 per share from $180, while Credit Suisse also said Apple’s earnings per share would drop by about 15 cents a share for every 5% drop in Greater China sales

— Click here to read the original story from the South China Morning Post.

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Still scope for US interest rate cut, says IMF’s chief economist

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There is still room for the U.S. Federal Reserve to cut interest rates, the International Monetary Fund’s (IMF) chief economist suggested ahead of the latest decision on rates from the central bank on Wednesday.

The Fed is widely expected to clear the way for a July interest rate cut by downgrading their economic forecast, tweaking the language in their statement and reducing their interest rate forecasts. Many analysts are now pricing in two rate cuts by the end of 2019. The Fed’s decision on interest rates is due at 2 p.m ET on Wednesday.

Speaking to CNBC’s Annette Wiesbach in Sintra, Portugal, IMF Chief Economist Gita Gopinath suggested that “you could use more conventional policy in the U.S., because there is still some scope in terms of interest rate cuts.”

President Trump has long been vocal in exerting pressure on the U.S. central bank to cut rates but Gopinath emphasized the importance of independent central banks “particularly on the operational side when it comes to making big policy decisions.”

“That has to be preserved – there are a lot of benefits that come from this independence, and it is important to maintain that.”

The Fed’s forthcoming decision on rates comes after European Central Bank (ECB) President Mario Draghi signaled Tuesday that more stimulus, in the form of a possible rate cut, could be forthcoming for the euro area.

U.S. President Donald Trump railed against Draghi and accused him of currency manipulation, before hinting that he might look to demote Fed Chairman Jerome Powell depending on the outcome of Wednesday’s Fed monetary policy meeting.

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Three Russians, one Ukrainian accused of 2014 downing of flight MH17

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Three Russians and a Ukrainian will face murder charges for the July 2014 downing of Malaysia Airlines flight MH17 over eastern Ukraine in which 298 people were killed, in a trial to start in the Netherlands next March, an investigation team said on Wednesday.

The suspects are likely to be tried in absentia, however, as the Netherlands has said Russia has not cooperated with the investigation and is not expected to hand anyone over.

Ukrainian rescue servicemen look through the wreckage of Malaysia Airlines flight MH17 on July 20, 2014 in Grabovo, Ukraine.

Rob Stothard | Getty Images

The Dutch-led international team tasked with assigning criminal responsibility for the plane’s destruction named the four suspects as Russians Sergey Dubinsky, Oleg Pulatov and Igor Girkin, and Ukrainian Leonid Kharchenko.

It said international arrest warrants for the four have been issued. MH17 was shot out of the sky on July 17, 2014, over territory held by pro-Russian separatists in eastern Ukraine as it was flying from Amsterdam to the Malaysian capital Kuala Lumpur. Everyone on board was killed.

Most of those on board were Dutch. The joint investigation team formed by Australia, Belgium, Malaysia, the Netherlands and Ukraine found that the plane was shot down by a Russian missile.

Last year Russian President Vladimir Putin called MH17’s downing a “terrible tragedy” but said that Moscow was not to blame and that there are other explanations for what happened.

The governments of the Netherlands and Australia have said they hold Russia legally responsible.

Asked if she expected the suspects to attend the trial, Silene Fredriksz, whose son Bryce was on the plane with his girlfriend Daisy, said: “No. No, I don’t think so. But I don’t care. I just want the truth, and this is the truth.”

Moscow has said it does not trust the investigation.

“Russia was unable to take part in the investigation despite expressing an interest right from the start and trying to join it”, Kremlin spokesman Dmitry Peskov told reporters earlier on Wednesday.

The investigation team said Girkin was a former FSB colonel who served as minister of defence of the Donetsk People’s Republic (DNR) in the summer of 2014.

It said Dubinsky was head of the military intelligence agency of DNR, while Pulatov was head of a second department of the DNR military intelligence agency.

Ukrainian national Kharchenko was head of a reconnaissance battalion for the second department, it said.

The team said it would ask the Russian government to allow it to question the suspects who are currently in Russia. It said Kharchenko was thought to be in Ukraine at the moment.

Prosecutors have previously said the missile system that brought down the plane came from the Russian 53rd Anti-Aircraft Brigade, based in the western Russian city of Kursk.

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American Airlines to become first US airline to order new Airbus plane

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Airbus A321XLR

Soruce: Airbus

American Airlines will become first U.S. airline to order new Airbus A321XLR, according to a source familiar with details of the agreement.

CNBC has learned American will order 50 XLR jets, converting orders and options previously placed for A321neos into firm order for the A321XLR. The deal will be formally announced later Wednesday at the Paris Air Show.

Airbus has targeted first deliveries of the XLR to start in 2023.

— CNBC’s Meghan Reeder contributed to this report.

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