Real estate weighs on China economy

Ren Zeping, a noted mainland economist, said China’s economic downward pressure will increase gradually.

And Ren added that real estate could weigh on the economy during the second half of this year and into the first half of 2022.

Indebted property developer China Evergrande Group (3333) said late on Wednesday that it expected its six-month net profit to slump as much as 39 percent from 12 months earlier because of the effects of a fall in selling prices and higher expenses.

Shares of China Evergrande Group’s electric vehicle unit were also collapsing in Hong Kong, wiping about US$80 billion (HK$622.4 million) from what was the property developer’s most valuable listed asset.

This came after smartphone maker Xiaomi’s (1810.HK) acquisition of autonomous driving startup Deepmotion for about HK$600 million on Wednesday.

Earlier this month, Reuters reported that Evergrande was in talks with Xiaomi and Shenzhen state-backed investment firms to sell part of a 65 percent stake in its electric vehicle unit.

In other news, the Shanghai-based developer Cifi Holdings Group (0884) saw its first-half net profit grow 7 percent to 3.6 billion yuan (HK$4.32 billion).

That led to an interim dividend of 0.1 yuan.

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