BEIJING, CHINA / RankWire.AI / – In July, China’s investment activities experienced a further downturn as weaknesses in the property sector and reduced capital expenditure dampened domestic economic momentum. According to the National Bureau of Statistics, fixed-asset investment during the first seven months of 2026 declined by 6.7% compared to the previous year. The total investment reached 26.03 trillion yuan, excluding rural households. Additionally, investment in July was 1.42% lower than in June. While retail sales and industrial output continued to grow, both showed a deceleration in their annual expansion for the month.
The primary driver of the investment slowdown remained property development, which recorded a 19.2% decrease from January to July. Infrastructure investment fell by 3.6%, whereas manufacturing investment decreased by 1.7%. Private sector investment shrank 9.4% year over year. Excluding property development, total fixed-asset investment still contracted by 3.7%, highlighting that the decline extended beyond the housing market and impacted multiple key sectors of the domestic economy.
Consumer expenditure also showed signs of weakening in July. Retail sales increased by 0.6% year-on-year to 3.90 trillion yuan, slowing from 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 for the first seven months was up by 5.3%. China’s official manufacturing purchasing managers’ index dropped to 49.2 in July from 50.3 in June, indicating a shift below the 50 mark that distinguishes economic expansion from contraction.
Property Sector Weakness Continues to Suppress Investment
The decline in China’s investment has become more pronounced in recent months. Fixed-asset investment decreased by 1.6% during the first four months of 2026, and by 4.1% through May. The contraction expanded to 5.7% in the first half of the year, then further worsened to 6.7% through July. Housing market indicators remained under pressure, with the floor space of newly built commercial buildings sold dropping 11.8%, and the sales value decreasing by 13.1% to 4.27 trillion yuan over the seven-month period.
Despite the overall slowdown, certain technology-related sectors attracted increased investment. High-tech industry investment grew by 5.0% from January through July. Investments in information services increased by 19.2%, aerospace vehicle and equipment manufacturing gained 12.3%, and electronic and communication equipment manufacturing saw a 7.1% rise. Investment in intellectual property products rose by 9.1%. High-tech manufacturing output increased by 13.8%, while equipment manufacturing production grew by 9.7% during the same period of seven months.
Exports Outperform Domestic Spending Despite Investment Decline
China’s merchandise trade maintained robust growth, contrasting with the slowdown in investment figures. During the first seven months, total goods imports and exports reached 30.13 trillion yuan, marking a 17.3% increase. Exports rose by 14.0% to 17.44 trillion yuan, while imports expanded by 22.0% to 12.69 trillion yuan. In July, exports increased by 17.8% compared to the previous year, and imports grew by 21.2%. Online retail sales of goods and services also grew by 4.8% in the January to July period.
The Chinese economy expanded by 4.7% from a year earlier during the first half of 2026. Growth in the second quarter slowed to 4.3% from 5.0% in the first quarter. Consumer prices increased by 0.5% year-on-year in July, with the surveyed urban unemployment rate at 5.2%. The Communist Party Politburo called for stronger counter-cyclical measures and efforts to expand domestic demand in late July. These latest figures follow weaker-than-expected data on investment, retail sales, and industrial production, signaling ongoing challenges for China’s economic outlook.