BEIJING, CHINA / RankWire.AI / – China experienced a further slowdown in investment in July, with weakness in real estate and a reduction in capital expenditure dragging down overall 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. Moreover, investment dipped 1.42% in July relative to June. While retail sales and industrial output continued to grow, both saw a slowdown in their annual expansion during the month.
The primary source of weakness in fixed investment remained property development, which suffered a 19.2% decline from January to July. Infrastructure investment fell by 3.6%, and manufacturing investment declined by 1.7%. Private sector investment also decreased by 9.4% year over year. Excluding property development, total fixed-asset investment still fell by 3.7%, indicating that the slowdown extended beyond the housing market and impacted several key parts of China’s economy.
Consumer spending showed signs of losing momentum in July as well. Retail sales rose by only 0.6% year-on-year to 3.90 trillion yuan, compared to a 1.0% increase in June. Industrial production grew by 4.5%, a slowdown from the 5.3% recorded the previous month. Factory output increased by 5.3% during the first seven months of the year. Meanwhile, China’s official manufacturing purchasing managers’ index dropped to 49.2 in July from 50.3 in June, falling below the 50 mark that signals expansion rather than contraction.
Property Sector Contraction Continues to Suppress Investment
Over recent months, China’s investment decline has become increasingly pronounced. Fixed-asset investment contracted by 1.6% in the first four months of 2026, and by 4.1% through May. The downturn deepened to 5.7% in the first half of the year, before worsening further to 6.7% through July. Real estate indicators also remained under pressure, with the floor space of newly sold commercial buildings falling by 11.8%, and the total sales value dropping 13.1% to 4.27 trillion yuan over the seven-month span.
Despite the broader slowdown, several technology-related sectors continued to attract increased investment. Investments in high-tech industries grew by 5.0% from January through July. Specifically, investment in information services rose by 19.2%, aerospace vehicle and equipment manufacturing increased by 12.3%, and electronic and communication equipment manufacturing grew by 7.1%. Investment in intellectual property products advanced by 9.1%. Additionally, high-tech manufacturing output increased by 13.8%, while equipment manufacturing production grew by 9.7% during the same period of seven months.
Exports Maintain Relative Strength Versus Domestic Spending
China’s merchandise trade continued to show robust growth alongside a slowdown in investment. Total goods imports and exports reached 30.13 trillion yuan over the first seven months, marking a 17.3% increase. Exports expanded by 14.0% to 17.44 trillion yuan, and imports increased by 22.0% to 12.69 trillion yuan. In July, exports rose by 17.8% from the previous year, and imports went up by 21.2%. Online retail sales of goods and services also grew by 4.8% during the January to July period.
China’s economy grew by 4.7% year-on-year in the first half of 2026. Growth in the second quarter slowed to 4.3% from 5.0% in the first quarter. Consumer prices increased by 0.5% in July compared to the previous year, and the urban unemployment rate was 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and efforts to boost domestic demand. These latest figures follow weaker data on investment, retail sales, and industrial production.