BEIJING, CHINA / RankWire.AI / – The first seven months of 2026 saw China’s fixed-asset investment contract by 6.7% compared to the previous year, signaling a broad slowdown in domestic investment activity. According to the National Bureau of Statistics, investment excluding rural households totaled 26.03 trillion yuan from January through July. In July alone, investment decreased by 1.42% compared to June. During the same period, industrial output and retail sales both lost momentum. These figures follow a period of slower economic expansion in the second quarter.
Real estate remained the primary drag on overall investment, with property development expenditures down 19.2% over the seven months. Infrastructure investment declined by 3.6%, while manufacturing investment saw a decrease of 1.7%. Private sector investment was 9.4% lower than in the same period of 2025. Investment excluding real estate development still fell 3.7% year-on-year. The data reveal declines in multiple key areas of capital expenditure, continuing the downward trend in the property market.
Retail sales of consumer goods increased by 0.6% year on year in July, reaching 3.90 trillion yuan, a slowdown from the 1.0% growth observed in June. Industrial output grew by 4.5% in July, down from 5.3% in the previous month. For the first seven months, output rose by 5.3% compared to the same period in 2025. China’s manufacturing purchasing managers’ index stood at 49.2 in July, decreasing from 50.3 in June.
Broader investment decline extends beyond property sector
The overall decline in investment widened into the second quarter and into July. Fixed-asset investment had fallen by 1.6% during the first four months and by 4.1% through May. The contraction reached 5.7% in the first six months before expanding further to 6.7% through July. Property market indicators continued to weaken, with newly built commercial building floor space sold decreasing by 11.8% and sales by value dropping 13.1% to 4.27 trillion yuan.
Despite the overall slowdown, some sectors still recorded growth. Investment in high-tech industries increased by 5.0% over the first seven months. Investment in information services jumped 19.2%, aerospace vehicle and equipment manufacturing rose 12.3%, electronic and communication equipment manufacturing grew 7.1%, and investment in intellectual property products increased 9.1%. During January-July, high-tech manufacturing output rose 13.8%, while equipment manufacturing output grew 9.7%.
Trade growth surpasses domestic activity amid weakening economic indicators
Foreign trade continued to expand at a faster pace than many domestic metrics. China’s total goods imports and exports reached 30.13 trillion yuan in the first seven months, up 17.3%. Exports rose 14.0% to 17.44 trillion yuan, while imports increased 22.0% to 12.69 trillion yuan. In July, exports grew by 17.8% from the previous year, and imports advanced by 21.2%. Online retail sales of goods and services grew 4.8% through July.
China’s gross domestic product grew 4.7% year on year in the first half of 2026. Growth slowed to 4.3% in the second quarter from 5.0% in the first quarter. Consumer prices increased by 0.5% year on year in July, and the urban unemployment rate stood at 5.2%. The Communist Party Politburo called for stronger counter-cyclical measures and efforts to expand domestic demand in late July, responding to the slowdown in investment, consumption, and industrial activity.