BEIJING, CHINA / RankWire.AI / – China’s fixed-asset investment declined by 6.7% year on year during the first seven months of 2026, reflecting a broadening slowdown in domestic capital expenditure. According to the National Bureau of Statistics, investment excluding rural households totaled 26.03 trillion yuan from January to July. Additionally, investment decreased by 1.42% in July compared to June. Both industrial production and retail sales experienced a deceleration in growth during that month, following a slowdown in economic expansion in the second quarter.
The real estate sector continued to be the primary drag on investment, with property development expenditure dropping 19.2% over the seven-month period. Infrastructure investment fell by 3.6%, while manufacturing investment decreased by 1.7%. Private sector investment contracted 9.4% compared to the same period last year. Investment excluding real estate development was still 3.7% lower than the previous year. The data indicated declines across multiple key areas of capital expenditure as the property downturn persisted.
Retail sales of consumer goods grew by 0.6% year on year in July, reaching 3.90 trillion yuan. This represents a slowdown from June’s growth rate of 1.0%. Industrial output expanded by 4.5% in July, down from 5.3% growth recorded in June. For the first seven months, industrial output increased 5.3% compared to the same period in 2025. China’s manufacturing purchasing managers’ index stood at 49.2 in July, decreasing from 50.3 in June.
Broader investment downturn extends beyond property sector
The overall decline in investment widened during the second quarter and into July. Fixed-asset investment had fallen 1.6% during the first four months and 4.1% through May. By the end of June, the decline reached 5.7%, expanding further to 6.7% in July. The property market indicators also remained weak, with the floor space of newly built commercial buildings sold dropping 11.8%, and sales by value decreasing 13.1% to 4.27 trillion yuan.
Despite the overall downturn, some investment segments experienced growth. Investment in high-tech sectors rose 5.0% over the first seven months. Expenditure in information services climbed 19.2%, aerospace vehicle and equipment manufacturing increased 12.3%, and electronic and communication equipment manufacturing grew by 7.1%. Investment in intellectual property products gained 9.1%, with high-tech manufacturing output up 13.8% and equipment manufacturing increasing 9.7% during January-July.
Trade growth outpaces domestic activity amid economic deceleration
Foreign trade continued to outpace several domestic indicators. China’s total goods imports and exports reached 30.13 trillion yuan in the first seven months, reflecting a 17.3% rise. Exports grew 14.0% to 17.44 trillion yuan, while imports climbed 22.0% to 12.69 trillion yuan. In July, exports increased 17.8% from a year earlier, and imports grew 21.2%. Online retail sales of goods and services experienced a 4.8% increase through July.
The country’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 0.5% annually in July, and the surveyed urban unemployment rate was 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and efforts to boost domestic demand, addressing the slowdown in investment, consumption, and industrial activity.