BEIJING, CHINA / RankWire.AI / – In July, China’s investment levels worsened, with sluggish property markets and reduced capital expenditure dampening domestic economic 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 a total investment of 26.03 trillion yuan, excluding rural households. Additionally, investment fell by 1.42% from June to July. While retail sales and industrial output continued to grow, both indicators showed a slowdown in their annual expansion during the same period.
The primary source of weakness in fixed investment persisted in property development, with real estate investment dropping 19.2% between January and July. Infrastructure investment declined 3.6%, and manufacturing investment decreased by 1.7%. Private sector investment saw a 9.4% decrease from the previous year. Even after excluding property development, total fixed-asset investment was down by 3.7%. These figures indicate that the decline in spending extended beyond housing, impacting multiple key sectors of China’s economy.
Consumer expenditure also showed signs of slowing in July. Retail sales increased by 0.6% year-on-year to 3.90 trillion yuan, following a 1.0% rise in June. Industrial output grew by 4.5%, a slowdown from the 5.3% growth registered a month earlier. Factory output expanded 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 shift below the 50-point threshold that marks expansion versus contraction.
Weakness in property sector continues to drag on investment
Recent months have seen a steady widening of China’s investment contraction. Fixed-asset investment declined by 1.6% in the first four months of 2026 and by 4.1% through May. This trend worsened, with a 5.7% decrease in the first half of the year, reaching 6.7% through July. The housing sector remained under pressure, as the sold floor space of newly constructed commercial buildings fell 11.8%, and the value of these sales dropped 13.1% to 4.27 trillion yuan over the seven months.
Despite the broader slowdown, several high-tech sectors continued to see increased investment. Investment in high-tech industries rose by 5.0% from January to July. Investments in information services increased by 19.2%, aerospace vehicle and equipment manufacturing grew by 12.3%, and electronic and communication equipment manufacturing increased 7.1%. Investment in intellectual property products rose by 9.1%. Additionally, high-tech manufacturing output increased by 13.8%, and equipment manufacturing production went up by 9.7% during this period.
Exports Outperform Domestic Spending Growth
China’s merchandise trade continued to show strong growth, contrasting with the slowdown in investment. Total imports and exports of goods reached 30.13 trillion yuan in the first seven months, marking 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% from the previous year, and imports grew by 21.2%. Online retail sales of goods and services advanced 4.8% during the January to July 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, and the urban unemployment rate stood at 5.2%. In late July, the Communist Party Politburo called for more vigorous counter-cyclical measures and policies aimed at boosting domestic demand. These latest figures followed weaker readings in investment, retail sales, and industrial output.