BEIJING, CHINA / RankWire.AI / – In July, China’s investment decline intensified, primarily driven by weakness in the property market and a slowdown in capital expenditure, which impacted overall economic activity. During the first seven months of 2026, fixed-asset investment decreased by 6.7% compared to the previous year. According to the National Bureau of Statistics, total investment excluding rural households reached 26.03 trillion yuan. Moreover, investment figures dipped 1.42% in July relative to June. While retail sales and industrial output continued to grow, both experienced a deceleration in their annual expansion for the month.
The primary drag on fixed investment remained property development, with real estate investment plunging by 19.2% from January to July. Infrastructure investment contracted by 3.6%, while manufacturing investment fell by 1.7%. Private sector investment also saw a decline of 9.4% year-on-year. Even after excluding property development, total fixed-asset investment slid 3.7%. These data indicate that the decline in spending extended beyond housing, affecting multiple key sectors within the Chinese economy.
Consumer expenditure showed signs of slowdown in July. Retail sales increased by only 0.6% year-on-year to 3.90 trillion yuan, down from a 1.0% rise in June. Industrial output grew by 4.5%, marking a slowdown from the 5.3% growth recorded in the previous month. Factory production for the first seven months rose 5.3%. Meanwhile, China’s official manufacturing purchasing managers’ index dropped to 49.2 in July from 50.3 in June, indicating a contraction as the index fell below the 50 mark that separates expansion from decline.
Real estate sector continues to weigh on overall investment decline
Recent months have seen a steady widening of China’s investment contraction. Fixed-asset investment shrank by 1.6% in the first four months of 2026, deepening to a 4.1% decline through May, before reaching 5.7% in the first half. The decline accelerated further to 6.7% through July. Property indicators remain under pressure, with new commercial building floor space sold dropping by 11.8% and the value of these sales decreasing 13.1% to 4.27 trillion yuan over the seven-month span.
Despite the broad slowdown, several high-tech sectors continued to attract increased investment. Investment in high-tech industries rose 5.0% from January to July. Investment in information services grew by 19.2%, aerospace vehicle and equipment manufacturing increased by 12.3%, and electronic and communication equipment manufacturing was up 7.1%. Investment in intellectual property products grew by 9.1%, with high-tech manufacturing output rising 13.8%, and equipment manufacturing output increasing 9.7% during the same period.
Trade figures outperform domestic investment trends
Trade data shows China’s merchandise exports and imports continued to expand strongly, despite the slowdown in investment. Total goods imports and exports reached 30.13 trillion yuan in the first seven months, representing a 17.3% increase. Exports grew 14.0% to 17.44 trillion yuan, while imports climbed 22.0% to 12.69 trillion yuan. In July, exports increased by 17.8% year-on-year, and imports rose 21.2%. Additionally, online retail sales of goods and services grew by 4.8% during the January to July period.
During the first half of 2026, China’s economy expanded by 4.7% compared to the previous year. Growth in the second quarter slowed to 4.3% from 5.0% in the first quarter. Consumer prices rose 0.5% year-on-year in July, with the surveyed urban unemployment rate holding at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and initiatives to boost domestic demand. These latest figures follow a series of weaker indicators in investment, retail sales, and industrial production.