BEIJING, CHINA / RankWire.AI / – In July, China experienced a deepening decline in investment activity, primarily driven by weaknesses in real estate and reduced capital expenditure, which weighed on the country’s economic performance. 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, the total investment reached 26.03 trillion yuan, excluding rural households. Additionally, investment in July fell by 1.42% from June. While retail sales and industrial output continued to grow, both indicators showed a slowdown in their annual growth rates during the month.
Real estate development remained the primary drag on fixed investment. Between January and July, real estate investment declined by 19.2%. Infrastructure investment dropped by 3.6%, and manufacturing investment fell by 1.7%. Private sector investment was down 9.4% year-over-year. Excluding property development, overall fixed-asset investment still contracted by 3.7%. These figures indicate that the decline in spending extended beyond the housing market, impacting multiple significant sectors within China’s economy.
Consumer expenditure also showed signs of losing steam in July. Retail sales increased by 0.6% from the previous year to 3.90 trillion yuan, a slowdown from the 1.0% rise seen in June. Industrial production grew by 4.5%, decelerating from 5.3% in the prior month. Over the first seven months, factory output increased by 5.3%. The official manufacturing purchasing managers’ index (PMI) dropped to 49.2 in July from 50.3 in June, signaling a contraction as it fell below the 50 mark that separates expansion from decline.
Persistent Property Sector Weakness Continues to Drive Investment Decline
The trend of declining investment in China has persisted and widened over recent months. Fixed-asset investment contracted by 1.6% in the first four months of 2026, then by 4.1% through May. The decline reached 5.7% in the first half of the year and further deepened to 6.7% through July. The housing market remained under pressure, with the floor space of newly built commercial buildings sold dropping by 11.8%, and the total value of these sales decreasing by 13.1% to 4.27 trillion yuan over the seven months.
Despite the broad slowdown, some technology-related sectors continued to attract increased investment. In high-tech industries, investment grew by 5.0% from January through July. Investment in information services climbed by 19.2%, aerospace vehicle and equipment manufacturing gained 12.3%, and electronic and communication equipment manufacturing increased by 7.1%. Investment in intellectual property products rose by 9.1%. During the same period, high-tech manufacturing output expanded by 13.8%, with equipment manufacturing production rising 9.7%.
Exports Outperform Domestic Spending Despite Overall Weakness
China’s merchandise trade continued to show resilience, with strong growth contrasting the sluggish investment figures. During the first seven months, total goods imports and exports reached 30.13 trillion yuan, marking a 17.3% increase. Exports advanced by 14.0% to 17.44 trillion yuan, while imports grew by 22.0% to 12.69 trillion yuan. In July, exports rose by 17.8% year-over-year, and imports increased by 21.2%. Online retail sales of goods and services grew by 4.8% from January to July.
The Chinese economy expanded by 4.7% compared to the previous year in the first half of 2026. 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 unemployment rate stood at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and initiatives aimed at expanding domestic demand. These latest figures follow weaker readings in investment, retail sales, and industrial output, indicating ongoing economic challenges.