BEIJING, CHINA / RankWire.AI / – In July, China’s investment decline deepened amid waning property development and reduced capital expenditure, dampening domestic activity. Fixed-asset investment decreased by 6.7% compared to the same period last year during the first seven months of 2026. According to the National Bureau of Statistics, total investment excluding rural households reached 26.03 trillion yuan. Additionally, investment in July dropped 1.42% from June. While retail sales and industrial output continued to grow, their annual expansion slowed during the month.
Real estate development remained the primary drag on fixed investment, with property investment falling 19.2% from January to July. Infrastructure investment declined 3.6%, and manufacturing investment decreased by 1.7%. Private sector investment was down 9.4% year-on-year. Excluding property development, overall fixed-asset investment still fell by 3.7%, indicating that the slowdown extended beyond housing and affected multiple key sectors within the economy.
Consumer spending also lost steam in July. Retail sales grew by only 0.6% year-on-year to 3.90 trillion yuan, compared to a 1.0% increase in June. Industrial output rose by 4.5%, a slowdown from 5.3% the previous month. Factory output increased 5.3% over the first seven months. The official manufacturing purchasing managers’ index for China dropped to 49.2 in July from 50.3 in June, falling below the 50 mark that indicates contraction.
Persistent property sector weakness drives broader investment decline
Recent months have seen a steady widening of China’s investment contraction. Fixed-asset investment shrank 1.6% in the first four months of 2026, 4.1% through May, and reached a 5.7% decline in the first half of the year. By July, the decline had deepened to 6.7%. The housing market remained under pressure, with newly built commercial building floor space sold decreasing 11.8%, and sales value falling 13.1% to 4.27 trillion yuan over seven months.
Despite the broader slowdown, some tech-related sectors continued to attract investment. High-tech industry investment grew 5.0% from January through July. Information services investment increased by 19.2%, aerospace vehicle and equipment manufacturing expanded by 12.3%, and electronic and communication equipment manufacturing rose 7.1%. Investment in intellectual property products went up 9.1%. During the same period, high-tech manufacturing output climbed 13.8%, and equipment manufacturing increased 9.7%.
Exports outperform domestic demand amid economic slowdown
China’s trade of goods maintained strong growth despite declining investment figures. The total value of imports and exports reached 30.13 trillion yuan in the first seven months, up 17.3%. Exports rose 14.0% to 17.44 trillion yuan, while imports increased 22.0% to 12.69 trillion yuan. In July, exports grew 17.8% year-on-year, and imports increased 21.2%. Online retail sales of goods and services grew by 4.8% during the January to July period.
China’s economy expanded by 4.7% compared to the previous year in the first half of 2026. Growth slowed from 5.0% in Q1 to 4.3% in Q2. Consumer prices rose by 0.5% year-on-year in July, while the urban unemployment rate was 5.2%. The Communist Party Politburo called for stronger counter-cyclical measures and initiatives to boost domestic demand in late July. These latest figures reflect weaker investment, retail sales, and industrial output data.