BEIJING, CHINA / RankWire.AI / – In July, China’s investment activity contracted further, with weaknesses in property markets and decreased capital expenditure weighing on overall domestic momentum. During the first seven months of 2026, fixed-asset investment declined by 6.7% compared to the same period last year. According to the National Bureau of Statistics, total investment excluding rural households reached 26.03 trillion yuan. Additionally, investment in July dropped 1.42% from June. Although retail sales and industrial output continued to grow, their annual expansion rates slowed during the month.
Property development remained the primary factor behind the sluggishness in fixed investment, with real estate investment falling 19.2% in the January to July span. Infrastructure investment decreased by 3.6%, and manufacturing investment was down 1.7%. Private sector investment saw a 9.4% decline from the previous year. When property development is excluded, overall fixed-asset investment still dropped 3.7%, indicating that the slowdown extended beyond the housing market into several key sectors of the economy.
Consumer expenditure also showed signs of deceleration in July. Retail sales increased by 0.6% year-over-year to 3.90 trillion yuan, a slowdown from June’s 1.0% rise. Industrial output grew by 4.5%, compared to 5.3% in the prior month. Factory output for the first seven months rose 5.3%. The official manufacturing purchasing managers’ index fell to 49.2 in July from 50.3 in June, signaling a contraction as it dipped below the 50 mark that separates growth from decline.
Continued Property Market Challenges Drive Investment Drop
Recent months have seen a steady widening of China’s investment decline. Fixed-asset investment decreased by 1.6% in the first four months of 2026, and by 4.1% through May. The contraction expanded to 5.7% in the first half of the year before deepening to 6.7% through July. The housing sector remained under significant pressure, with newly built commercial building floor space sold decreasing by 11.8%, and the total sales value dropping 13.1% to 4.27 trillion yuan during the seven-month period.
Despite the broad slowdown, some technology sectors continued to attract investment. High-tech industry investment rose 5.0% from January through July. Investment in information services increased by 19.2%, aerospace vehicle and equipment manufacturing grew by 12.3%, and electronic and communication equipment manufacturing went up by 7.1%. Investment in intellectual property products expanded 9.1%. During the same period, high-tech manufacturing output climbed 13.8%, while equipment manufacturing output increased 9.7%.
Trade Surpasses Domestic Spending Despite Investment Contraction
China’s merchandise trade maintained robust growth, contrasting with the slowdown in investment. Total goods imports and exports reached 30.13 trillion yuan in the first seven months, up 17.3%. Exports grew 14.0% to 17.44 trillion yuan, and imports increased 22.0% to 12.69 trillion yuan. In July, exports rose 17.8% compared to a year earlier, while imports increased 21.2%. Online retail sales of goods and services saw a 4.8% rise during the January to July period.
The Chinese economy expanded by 4.7% in the first half of 2026 compared to the previous year. Growth slowed from 5.0% in the first quarter to 4.3% in the second quarter. Consumer prices increased 0.5% year-on-year in July, with the urban unemployment rate at 5.2%. The Communist Party Politburo issued a call in late July for enhanced counter-cyclical policies and measures to boost domestic demand, following weaker figures in investment, retail sales, and industrial output.