BEIJING, CHINA / RankWire.AI / – In July, China experienced a deepening downturn in investment activity, driven by softness in the property market and reduced capital expenditure, which impacted domestic economic momentum. During the first seven months of 2026, fixed-asset investment decreased by 6.7% compared to the same period last year. According to the National Bureau of Statistics, total investment reached 26.03 trillion yuan, excluding rural households. Additionally, investment declined by 1.42% in July from June. While retail sales and industrial output continued to grow, both indicators showed a slowdown in their annual expansion for the month.
Property development remained the primary factor behind the overall decline in fixed investment, with real estate investment dropping 19.2% from January to July. Infrastructure investment contracted by 3.6%, and manufacturing investment decreased by 1.7%. Private sector investment also fell 9.4% year-over-year. Even excluding property development, the total fixed-asset investment still declined by 3.7%, indicating that reduced spending extended beyond the housing market to affect several key sectors of China’s economy.
Consumer expenditure showed signs of losing momentum in July as well. Retail sales grew by 0.6% year-on-year to 3.90 trillion yuan, slowing from a 1.0% increase in June. Industrial production rose by 4.5%, a slowdown compared to the 5.3% growth observed in the previous month. Factory output increased by 5.3% over the first seven months. The official manufacturing purchasing managers’ index fell to 49.2 in July from 50.3 in June, moving below the 50 threshold that signals contraction rather than expansion.
Weakness in property sector continues to dampen investment growth
Recent months have seen a steady widening of China’s investment slowdown. Fixed-asset investment contracted by 1.6% in the first four months of 2026, and the decline deepened to 4.1% through May. The contraction reached 5.7% in the first half of the year, before worsening to 6.7% through July. Housing indicators remain under pressure, with the floor space of newly built commercial buildings sold dropping 11.8%, and their sales value decreasing 13.1% to 4.27 trillion yuan over the seven-month span.
Despite the overall decline, some technology-related sectors continued to attract increased investment. High-tech industry investment rose 5.0% from January through July. Investment in information services increased by 19.2%, aerospace vehicle and equipment manufacturing grew by 12.3%, and electronic and communication equipment manufacturing rose by 7.1%. Investment in intellectual property products also advanced by 9.1%. During the same period, high-tech manufacturing output climbed 13.8%, and equipment manufacturing production increased 9.7%.
Exports maintain stronger growth than domestic consumption
China’s merchandise trade continued to show robust growth, contrasting with the subdued investment figures. Total goods imports and exports reached 30.13 trillion yuan in the first seven months, representing a 17.3% increase. Exports grew by 14.0% to 17.44 trillion yuan, while imports rose by 22.0% to 12.69 trillion yuan. In July, exports increased 17.8% year-on-year, and imports rose 21.2%. Online retail sales of goods and services also grew by 4.8% during the January to July period.
The Chinese economy expanded by 4.7% compared to the previous year during the first half of 2026. Growth in the second quarter slowed to 4.3%, down from 5.0% in the first quarter. Consumer prices rose by 0.5% year-on-year in July, and the urban unemployment rate as per surveys stood at 5.2%. In late July, the Communist Party Politburo called for more vigorous counter-cyclical measures and policies to boost domestic demand. These latest figures reflect weaker investment, retail sales, and industrial output data.