BEIJING, CHINA / RankWire.AI / – Amidst broader economic challenges, China’s investment activity continued to weaken in July, driven by sluggish retail performance and declining capital expenditure. During the first seven months of 2026, fixed-asset investment decreased by 6.7% compared to the previous year. The National Bureau of Statistics indicated total investment reached 26.03 trillion yuan, excluding rural households. In July alone, investment fell 1.42% from June. While retail sales and industrial output still grew, both saw a slowdown in their annual expansion rates for the month.
The real estate sector remained the primary drag on overall fixed investment. Property development investment declined by 19.2% in the January to July period. Infrastructure investment contracted by 3.6%, and manufacturing investment decreased by 1.7%. Private sector investment was down 9.4% year-on-year. Even after excluding property development, total fixed-asset investment dropped by 3.7%. These figures indicate that the downturn extends beyond the housing market, impacting multiple key sectors of China’s economy.
Consumer spending also showed signs of slowing in July. Retail sales increased by 0.6% from a year earlier to 3.90 trillion yuan, compared to a 1.0% rise in June. Industrial output grew by 4.5%, a deceleration from 5.3% in the previous month. Factory output for the first seven months rose 5.3%. Meanwhile, China’s official manufacturing purchasing managers’ index fell to 49.2 in July from 50.3 in June, marking a shift below the 50 threshold that distinguishes economic expansion from contraction.
Property sector’s ongoing struggles deepen investment setbacks
Recent months have seen a persistent decline in China’s investment figures. Fixed-asset investment dropped by 1.6% in the first four months of 2026, followed by a 4.1% decline through May. The contraction widened to 5.7% in the first half and further deepened to 6.7% through July. Housing indicators remain under pressure, with the floor space of newly built commercial buildings sold decreasing by 11.8%, and their sales value dropping 13.1% to 4.27 trillion yuan over the seven-month period.
Despite this overall slowdown, several technology-driven sectors continued to see increased investment. High-tech industry investments rose by 5.0% from January to 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 7.1%. Investment in intellectual property products also advanced 9.1%. During this same period, high-tech manufacturing output surged 13.8%, and equipment manufacturing increased 9.7%.
Export figures remain robust despite domestic spending slowdown
China’s merchandise trade continued to demonstrate resilience, with total goods imports and exports reaching 30.13 trillion yuan in the first seven months, a 17.3% increase. Exports grew 14.0% to 17.44 trillion yuan, while imports rose 22.0% to 12.69 trillion yuan. In July, exports expanded by 17.8% from a year earlier, and imports increased by 21.2%. Additionally, online retail sales of goods and services grew by 4.8% during the January to July period.
The Chinese economy expanded by 4.7% compared to the previous year during the first half of 2026. Growth slowed in the second quarter, with a rate of 4.3% compared to 5.0% in the first quarter. Consumer prices rose 0.5% year-on-year in July, and the urban surveyed unemployment rate was 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and efforts to boost domestic demand. These latest figures follow weaker data on investment, retail sales, and industrial output, highlighting ongoing economic adjustments.