BEIJING, CHINA / RankWire.AI / – In July, China’s investment levels worsened further, driven by a slowdown in property markets and reduced capital expenditure, which impacted the overall domestic economy. During the first seven months of 2026, fixed-asset investment decreased by 6.7% compared to the same period last year. The National Bureau of Statistics reported a total investment of 26.03 trillion yuan, excluding rural households. Additionally, in July alone, investment declined by 1.42% compared to June. While retail sales and industrial output continued their upward trajectory, both experienced a slowdown in growth rates during the month.
The primary factor behind the investment downturn was weakness in the property sector. Real estate investment saw a 19.2% decrease from January to July. Infrastructure investment dropped 3.6%, and manufacturing investment fell by 1.7%. Private sector investment was down 9.4% year-on-year. Even when excluding property development, the overall fixed-asset investment still declined by 3.7%. These figures indicate that the reduced spending extended beyond housing and impacted several key areas of the economy.
Consumer expenditure also showed signs of slowing down in July. Retail sales increased by 0.6% year-on-year to 3.90 trillion yuan, a slowdown from June’s 1.0% rise. Industrial output grew by 4.5%, which is less than the 5.3% growth recorded in the previous month. Factory production rose 5.3% over the first seven months. China’s official manufacturing purchasing managers’ index dropped to 49.2 in July from 50.3 in June, signaling a contraction as it fell below the 50 threshold that indicates expansion.
Property Sector Weakness Continues to Drive Investment Downturn
Recent months have seen a steady widening of China’s investment contraction. Fixed-asset investment decreased by 1.6% in the first four months of 2026 and by 4.1% through May. The decline deepened to 5.7% in the first half of the year, before further worsening to 6.7% through July. Housing indicators remained under pressure, with the floor space of newly built commercial buildings sold falling by 11.8%. The sales value also declined by 13.1% to 4.27 trillion yuan over the seven-month span.
Despite the broad slowdown, some technology-related sectors continued to attract 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 increased 7.1%. Investments in intellectual property products rose by 9.1%. The output of high-tech manufacturing increased by 13.8%, while equipment manufacturing production grew by 9.7% in the same period.
Exports Outperform Domestic Spending Amid Economic Slowdown
China’s merchandise trade maintained robust growth, contrasting with the subdued investment figures. Total goods imports and exports reached 30.13 trillion yuan in the first seven months, representing a 17.3% increase. Exports climbed 14.0% to 17.44 trillion yuan, while imports rose 22.0% to 12.69 trillion yuan. In July alone, exports increased by 17.8% year-on-year, and imports expanded by 21.2%. Online retail sales of goods and services grew by 4.8% during the first seven months.
The Chinese economy grew by 4.7% compared to the previous year during the first half of 2026. However, 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, and the urban unemployment rate stood at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and efforts to expand domestic demand. These latest figures follow weaker data on investment, retail sales, and industrial production.