BEIJING, CHINA / RankWire.AI / – The National Bureau of Statistics has reported that China’s investment contraction worsened in July, driven by a slowdown in property and capital expenditure. Fixed-asset investment decreased 6.7% compared to the same period last year for the first seven months of 2026. The total investment excluding rural households was 26.03 trillion yuan. Additionally, investment in July declined by 1.42% from June. While retail sales and industrial output continued to grow, both experienced a deceleration in their annual expansion during the month.
The primary source of weakness in fixed investment remained property development, with real estate investment dropping 19.2% between January and July. Infrastructure investment fell by 3.6%, and manufacturing investment decreased by 1.7%. Private sector investment also declined by 9.4% year-over-year. Even when excluding property development, overall fixed-asset investment saw a 3.7% fall. These figures highlight that the slowdown extended beyond the housing market, impacting several key sectors of the domestic economy.
Consumer spending showed signs of losing momentum in July as well. Retail sales increased by 0.6% year-over-year to 3.90 trillion yuan, down from a 1.0% rise in June. Industrial output grew by 4.5%, which was a slowdown from 5.3% the previous month. Factory production expanded 5.3% over the first seven months of 2026. The official Chinese Communist Party Politburo reported that China’s manufacturing purchasing managers’ index declined to 49.2 in July from 50.3 in June, placing it below the 50 threshold that indicates expansion versus contraction.
Property Sector Weakness Continues to Drive Investment Decline
Recent months have seen a steady worsening of China’s investment outlook. Fixed-asset investment was down 1.6% in the first four months of 2026, and by 4.1% through May. The contraction widened to 5.7% during the first half of the year and deepened further to 6.7% through July. Real estate indicators remained under pressure, with the floor space of newly sold commercial buildings decreasing by 11.8%, and sales value dropping 13.1% to 4.27 trillion yuan over the seven months.
Despite the broader decline, certain technology sectors continued to draw increased investment. High-tech industry investment grew by 5.0% from January through July. Investments in information services increased 19.2%, aerospace vehicle and equipment manufacturing rose 12.3%, and electronic and communication equipment manufacturing went up 7.1%. Investment in intellectual property products advanced 9.1%. During the same period, high-tech manufacturing output increased by 13.8%, and equipment manufacturing production rose 9.7%.
Exports Maintain a Stronger Trajectory Compared to Domestic Spending
China’s merchandise trade continued its robust growth trend, despite the slowdown in investment. Total goods imports and exports reached 30.13 trillion yuan for the first seven months, reflecting a 17.3% rise. Exports increased by 14.0% to 17.44 trillion yuan, while imports surged 22.0% to 12.69 trillion yuan. In July, exports rose 17.8% year-over-year, and imports grew by 21.2%. Online retail sales of goods and services also saw a 4.8% increase from January to July.
During the first half of 2026, China’s economy expanded 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 rose by 0.5% year-over-year in July, and the urban unemployment rate was at 5.2%. In late July, the Communist Party Politburo emphasized the need for stronger counter-cyclical policies and measures to stimulate domestic demand. These latest figures follow weaker data on investment, retail sales, and industrial production.