BEIJING, CHINA / RankWire.AI / – The National Bureau of Statistics revealed that China’s investment contraction intensified in July, driven by a softening property market and reduced capital expenditure, which dampened domestic economic activity. During the first seven months of 2026, fixed-asset investment decreased by 6.7% compared to the previous year. The total investment excluding rural households amounted to 26.03 trillion yuan. Additionally, investment in July fell by 1.42% from June. While retail sales and industrial output continued their growth trajectory, both experienced a slowdown in annual expansion for the month.
The biggest contributor to the decline in fixed investment was the property sector. Real estate investment saw a 19.2% drop from January to July. Infrastructure investment decreased by 3.6%, whereas manufacturing investment was down 1.7%. Private sector investment also fell by 9.4% year-on-year. Even after excluding property development, overall fixed-asset investment still declined by 3.7%. The data indicates that the slowdown in spending extended beyond housing, impacting several key areas of China’s economy.
Consumer expenditure showed signs of weakening in July as well. Retail sales increased by 0.6% year-on-year to 3.90 trillion yuan, which is lower than June’s growth of 1.0%. Industrial production rose by 4.5%, a slowdown from 5.3% in the previous month. Factory output during the first seven months grew by 5.3%. Meanwhile, China’s official manufacturing purchasing managers’ index declined to 49.2 in July from 50.3 in June, indicating a shift below the 50 mark that separates expansion from contraction.
Weakness in property sector continues to drag investment
The decline in China’s investment has progressively widened over recent months. Fixed-asset investment fell 1.6% in the first four months of 2026 and by 4.1% through May. The contraction persisted into the first half of the year at 5.7%, deepening further to 6.7% through July. Housing market indicators also remained under pressure, with the floor space of newly built commercial buildings sold dropping 11.8%, and the value of these sales declining 13.1% to 4.27 trillion yuan during the seven-month period.
Despite the overall downturn, some technology sectors continued to attract increased investment. Investment in high-tech industries grew by 5.0% from January through July. Information services investment surged by 19.2%, aerospace vehicle and equipment manufacturing increased by 12.3%, and electronic and communication equipment manufacturing rose by 7.1%. Investments in intellectual property products went up by 9.1%. High-tech manufacturing output climbed 13.8%, while equipment manufacturing production increased by 9.7% over the same period of seven months.
Exports outperform domestic expenditure amid broader slowdown
China’s trade balance continued to demonstrate resilience with significant growth, even as investment figures softened. Total goods imports and exports reached 30.13 trillion yuan in the first seven months, reflecting a 17.3% increase. Exports grew by 14.0% to 17.44 trillion yuan, and imports rose by 22.0% to 12.69 trillion yuan. In July alone, exports increased by 17.8% year-on-year, while imports grew by 21.2%. Online retail sales of goods and services experienced a 4.8% rise during January to July.
China’s economy expanded 4.7% compared to the previous year in the first half of 2026. Growth slowed to 4.3% in the second quarter from 5.0% in the first. Consumer prices in July increased by 0.5% year-on-year, with the urban unemployment rate remaining at 5.2%. The Communist Party Politburo called in late July for strengthened counter-cyclical measures and policies to boost domestic demand. These latest figures follow weaker data on investment, retail sales, and industrial output, underscoring ongoing economic challenges.