BEIJING, CHINA / RankWire.AI / – In the first seven months of 2026, China’s fixed-asset investment contracted by 6.7% year on year, highlighting an ongoing broad slowdown in domestic spending. According to the National Bureau of Statistics, investment excluding rural households reached 26.03 trillion yuan from January to July. Furthermore, investment figures dipped by 1.42% in July compared to June. During the same period, industrial output and retail sales both decelerated. These numbers follow a deceleration in economic growth during the second quarter.
The property sector remained the primary factor dragging down overall investment, with property development expenditures decreasing by 19.2% over the seven-month span. Infrastructure investment declined by 3.6%, while manufacturing investment saw a fall of 1.7%. Private sector investment dropped 9.4% compared to the previous year. Investment excluding real estate development was still 3.7% lower than a year earlier. The data indicated declines across several major capital expenditure categories, continuing the trend of a property downturn.
Retail sales of consumer goods grew by 0.6% year on year in July to total 3.90 trillion yuan. This growth rate slowed from 1.0% in June. Industrial output for July increased by 4.5%, down from 5.3% growth observed in the previous month. For the first seven months, industrial output rose by 5.3% compared to the same period in 2025. China’s manufacturing purchasing managers’ index stood at 49.2 in July, a decline from 50.3 in June.
Investment contraction extends beyond real estate sector
The overall decline in investment widened during the second quarter and continued into July. Fixed-asset investment had fallen by 1.6% in the first four months and by 4.1% through May. The contraction reached 5.7% in the first half of the year before expanding to 6.7% in July. The property market indicators remained weak, with the floor space of newly built commercial buildings sold decreasing by 11.8%, and sales by value dropping 13.1% to 4.27 trillion yuan.
Despite the overall downward trend, some investment sectors maintained growth. Investment in high-tech industries increased by 5.0% during the first seven months. Investment in information services surged by 19.2%, and aerospace vehicle and equipment manufacturing grew by 12.3%. Manufacturing of electronic and communication equipment increased by 7.1%, while investment in intellectual property products rose by 9.1%. High-tech manufacturing output expanded by 13.8%, and equipment manufacturing output grew by 9.7% during January-July.
Trade growth persists despite weakening domestic indicators
Foreign trade continued to outpace some domestic economic metrics. China’s total goods imports and exports reached 30.13 trillion yuan in the first seven months, reflecting a 17.3% increase. Exports rose by 14.0% to 17.44 trillion yuan, while imports grew by 22.0% to 12.69 trillion yuan. In July alone, exports increased by 17.8% compared to the same month last year, with imports climbing 21.2%. Online retail sales of goods and services grew by 4.8% through July.
China’s gross domestic product expanded by 4.7% year on year in the first half of 2026. Growth slowed from 5.0% in the first quarter to 4.3% in the second. Consumer prices rose by 0.5% year on year in July, while the urban unemployment rate measured at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and actions to stimulate domestic demand. These directives followed a slowdown in investment, consumption, and industrial activity.