BEIJING, CHINA / RankWire.AI / – In July, China’s investment contraction intensified, driven by a downturn in property and reduced capital expenditure. Fixed-asset investment decreased by 6.7% compared to the previous year during the first seven months of 2026. According to the National Bureau of Statistics, total investment excluding rural households amounted to 26.03 trillion yuan. In July alone, investment dipped 1.42% from June. While retail sales and industrial output continued to grow, both showed signs of slower annual expansion for the month.
The primary source of weakness was property development. Real estate investment fell 19.2% from January to July. Infrastructure investment declined 3.6%, and manufacturing investment shrank by 1.7%. Private investment dropped 9.4% year-on-year. Excluding property development, overall fixed-asset investment still fell 3.7%. The data indicated that the decline in spending extended beyond housing, impacting multiple key areas of China’s economy.
Consumer spending also slowed in July. Retail sales increased by 0.6% year-on-year to 3.90 trillion yuan, down from a 1.0% rise in June. Industrial production rose 4.5%, a slowdown from 5.3% in the previous month. Factory output grew 5.3% over the first seven months. China’s official manufacturing purchasing managers’ index dropped to 49.2 in July from 50.3 in June, indicating a contraction since the index fell below the 50-point threshold separating growth from decline.
Property sector weakness continues to influence investment declines
The pace of China’s investment decline has persisted, widening over recent months. Fixed-asset investment decreased 1.6% in the first four months of 2026, and 4.1% through May. It contracted 5.7% in the first half of the year and deepened to 6.7% by July. Housing indicators also remained fragile. The floor space of newly sold commercial buildings fell 11.8%, while sales value dropped 13.1% to 4.27 trillion yuan during the seven-month period.
However, certain tech-related industries continued to attract increased investments despite the overall slowdown. Investment in high-tech sectors grew 5.0% from January through July. Investment in information services rose 19.2%, aerospace vehicle and equipment manufacturing increased 12.3%, and electronic and communication equipment manufacturing was up 7.1%. Investment in intellectual property products improved 9.1%. During the same period, high-tech manufacturing output climbed 13.8%, and equipment manufacturing rose 9.7%.
Foreign trade remains resilient compared to domestic investment
China’s trade of goods continued to show strong growth despite weaker investment figures. Total imports and exports reached 30.13 trillion yuan in the first seven months, up 17.3%. Exports increased 14.0% to 17.44 trillion yuan, and imports grew 22.0% to 12.69 trillion yuan. In July, exports rose 17.8% year-on-year, while imports increased 21.2%. Online retail sales of goods and services increased by 4.8% during the January to July period.
During the first half of 2026, China’s economy grew 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 0.5% year-on-year in July. The urban unemployment rate was at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and efforts to boost domestic demand. These latest figures followed weaker readings in investment, retail sales, and industrial production.