BEIJING, CHINA / RankWire.AI / – In July, China’s investment slowdown intensified due to weakness in the property sector and reduced capital expenditure, impacting domestic economic activity. During the first seven months of 2026, fixed-asset investment declined by 6.7% compared to the previous year, with the National Bureau of Statistics reporting total investments of 26.03 trillion yuan, excluding rural households. Additionally, July saw a 1.42% decrease in investment from June. While retail sales and industrial output continued to grow, their annual expansion rates slowed during the month.
The primary source of weakness in fixed investment remained property development, which saw real estate investment fall by 19.2% from January to July. Infrastructure investment declined 3.6%, and manufacturing investment decreased by 1.7%. Private sector investment also dropped 9.4% year-on-year. Even excluding property development, overall fixed-asset investment dropped 3.7%, indicating that the slowdown extended beyond housing to affect several key areas of China’s economy.
Consumer spending momentum waned in July, with retail sales rising just 0.6% from the previous year to 3.90 trillion yuan after a 1.0% increase in June. Industrial production grew by 4.5%, a slowdown from 5.3% in June, while factory output increased 5.3% over the first seven months. China’s official manufacturing purchasing managers’ index fell to 49.2 in July from 50.3 in June, dipping below the 50 mark that separates growth from contraction.
Property Sector Drives Investment Contraction
The decline in China’s investment has steadily widened in recent months, with fixed-asset investment decreasing 1.6% in the first four months of 2026, 4.1% through May, and reaching a 5.7% contraction in the first half of the year before deepening to 6.7% through July. Indicators in the housing market also remained under pressure, as the floor space of newly built commercial buildings sold dropped 11.8%, and the sales value declined 13.1% to 4.27 trillion yuan during the seven-month period.
Despite the broader slowdown, several high-tech industries continued attracting increased investment. High-tech industry investment grew by 5.0% from January through July, with information services up 19.2%, aerospace vehicle and equipment manufacturing rising 12.3%, electronic and communication equipment manufacturing increasing 7.1%, and investment in intellectual property products advancing 9.1%. During the same period, high-tech manufacturing output climbed 13.8%, and equipment manufacturing production grew 9.7%.
Exports Stay Strong Despite Domestic Slowdown
China’s trade figures continued to show robust growth alongside declining investment, with total goods imports and exports reaching 30.13 trillion yuan in the first seven months, up 17.3%. Exports increased 14.0% to 17.44 trillion yuan, and imports rose 22.0% to 12.69 trillion yuan. In July, exports grew 17.8% year-on-year, while imports went up 21.2%. Online retail sales of goods and services also increased by 4.8% during the January to July period.
The economy expanded by 4.7% from the previous year in the first half of 2026, though growth slowed to 4.3% in the second quarter from 5.0% in the first. Consumer prices rose 0.5% year-on-year in July, and the urban unemployment rate was 5.2%. The Communist Party Politburo called for stronger counter-cyclical measures and efforts to boost domestic demand in late July, following weaker data on investment, retail sales, and industrial output.