BEIJING, CHINA / RankWire.AI / – In July, China experienced a further downturn in investment, driven by weaknesses in the property sector and reduced capital expenditure, which dampened domestic activity. During the first seven months of 2026, fixed-asset investment decreased by 6.7% compared to the previous year. The National Bureau of Statistics reported total investment of 26.03 trillion yuan, excluding rural households. Additionally, investment in July fell 1.42% from June. Despite continued growth in retail sales and industrial output, both indicators showed signs of slowdown in their annual increases for the month.
The major drag on fixed investment remained property development, with real estate investment dropping 19.2% from January to July. Infrastructure investment declined 3.6%, while manufacturing investment saw a 1.7% decrease. Private sector investment also fell 9.4% year-on-year. Even when excluding property development, total fixed-asset investment shrank by 3.7%. These figures reveal that reduced spending extended beyond the housing market, impacting several significant areas of China’s economy.
Consumer spending in July also lost momentum. Retail sales increased by only 0.6% year-on-year to 3.90 trillion yuan, compared to a 1.0% rise in June. Industrial production grew by 4.5%, a slowdown from the 5.3% rate recorded in the previous month. Factory output over the first seven months increased by 5.3%. Meanwhile, China’s official manufacturing purchasing managers’ index declined to 49.2 in July from 50.3 in June, indicating a contraction as it fell below the 50 threshold that separates expansion from decline.
Weakness in Property Sector Continues to Drive Investment Contraction
The decline in China’s investment has persisted and intensified over recent months. Fixed-asset investment contracted by 1.6% during the first four months of 2026, and the decline widened to 4.1% through May. The downturn reached 5.7% in the first half of the year before deepening to 6.7% through July. The housing market remained under pressure, with newly built commercial building floor space sold decreasing by 11.8%, and sales value falling 13.1% to 4.27 trillion yuan over the seven months.
Despite this broad slowdown, several technology-related sectors attracted increased investment. Investment in high-tech industries grew by 5.0% from January through July. Information services saw a 19.2% rise, aerospace vehicle and equipment manufacturing increased 12.3%, and electronic and communication equipment manufacturing grew 7.1%. Investment in intellectual property products advanced by 9.1%. High-tech manufacturing output jumped 13.8%, and equipment manufacturing increased 9.7% over the same period of seven months.
Exports Continue Outperforming Domestic Investment Trends
China’s merchandise trade maintained strong growth, contrasting with the slowdown in investment. During the first seven months, total goods imports and exports reached 30.13 trillion yuan, marking a 17.3% increase. Exports rose 14.0% to 17.44 trillion yuan, while imports climbed 22.0% to 12.69 trillion yuan. In July alone, exports increased by 17.8% from the previous year, and imports grew by 21.2%. Online retail sales of goods and services also rose 4.8% during the January to July period.
China’s economy expanded by 4.7% from a year earlier in the first half of 2026. Growth slowed to 4.3% in the second quarter from 5.0% in the first quarter. Consumer prices increased by 0.5% year-on-year in July, with the urban unemployment rate remaining 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 weaker readings for investment, retail sales growth, and industrial production, highlighting ongoing economic challenges.