BEIJING, CHINA / RankWire.AI / – In July, China’s investment landscape saw a further contraction, weighed down by ongoing weakness in real estate and reduced capital expenditure, impacting domestic 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 amounted to 26.03 trillion yuan. The data also indicated a 1.42% decline in July’s investment relative to June. While retail sales and industrial output continued to grow, both experienced a slowdown in their year-over-year expansion during the month.
The primary drag on fixed investment remained real estate development, which saw a 19.2% drop from January to July. Infrastructure investment contracted by 3.6%, and manufacturing investment fell by 1.7%. Private sector investment was down 9.4% compared to last year. Even when excluding property development, overall fixed-asset investment still declined by 3.7%. The figures reveal that reduced spending extended beyond housing, affecting multiple key sectors of China’s economy.
Consumer expenditure also showed signs of easing in July. Retail sales increased by 0.6% year-on-year to 3.90 trillion yuan, following a 1.0% rise in June. Industrial production grew by 4.5%, a slowdown from the 5.3% growth recorded in the previous month. Factory output expanded by 5.3% over the first seven months. Meanwhile, China’s official manufacturing purchasing managers’ index dropped to 49.2 in July from 50.3 in June, indicating a contraction as it fell below the 50-point threshold that separates expansion from contraction.
Property Sector Weakness Continues to Impact Investment Trends
Recent months have seen a steady widening of China’s investment decline. Fixed-asset investment decreased by 1.6% during the first four months of 2026, and by 4.1% through May. The contraction deepened to 5.7% in the first half of the year, before further declining to 6.7% by July. The housing market remained under pressure; the floor space of newly sold commercial buildings dropped 11.8%, while the value of those sales declined 13.1% to 4.27 trillion yuan in the seven-month period.
Despite the broader slowdown, several high-tech industries continued to attract increased investment. Investment in high-tech sectors grew by 5.0% from January through July. Investment in information services rose 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 also rose by 9.1%. The output of high-tech manufacturing climbed 13.8%, while equipment manufacturing saw a 9.7% increase during the same period.
Trade Surpasses Domestic Spending Despite Slowing Investment
China’s merchandise trade maintained robust growth, contrasting with the decline in investment figures. During the first seven months, total goods imports and exports reached 30.13 trillion yuan, representing a 17.3% increase. Exports rose by 14.0% to 17.44 trillion yuan, while imports grew 22.0% to 12.69 trillion yuan. In July alone, exports increased 17.8% year-on-year, and imports grew 21.2%. Online retail sales of goods and services also advanced by 4.8% in this period.
During the first half of 2026, China’s economy expanded by 4.7% compared to the previous year. Growth slowed to 4.3% in the second quarter from 5.0% in the first. Consumer prices increased by 0.5% year-on-year in July, while the urban surveyed unemployment rate was 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical policies and measures to stimulate domestic demand. These latest statistics reflect the subdued investment, retail sales, and industrial output data, signaling ongoing economic challenges.