BEIJING, CHINA / RankWire.AI / – China’s investment activity contracted further in July, driven by sluggish property markets and reduced capital expenditure, impacting the country’s economic momentum. Fixed-asset investment decreased by 6.7% compared to the same period last year during the first seven months of 2026. The National Bureau of Statistics announced a total investment of 26.03 trillion yuan, excluding rural households. Additionally, investment dipped 1.42% in July relative to June. While retail sales and industrial output continued to grow, both indicators showed a slowdown in their annual expansion rates for the month.
The primary driver of the decline in fixed investment was the property sector. Real estate investment shrank by 19.2% from January to July. Infrastructure investment decreased by 3.6%, and manufacturing investment fell by 1.7%. Private sector investment also declined by 9.4% from the previous year. Excluding property development, the overall fixed-asset investment still dropped by 3.7%. These figures highlight that the slowdown extends beyond housing and affects several key areas of China’s economy.
Consumer spending also showed signs of losing momentum in July. Retail sales increased by 0.6% year-on-year to 3.90 trillion yuan, after a 1.0% rise in June. Industrial output grew by 4.5%, a slowdown from the 5.3% growth recorded in the previous month. Over the first seven months, factory output increased by 5.3%. Meanwhile, China’s official manufacturing purchasing managers’ index dropped to 49.2 in July from 50.3 in June, indicating a contraction as the index fell below the 50-point threshold that separates expansion from decline.
Property Sector’s Weakness Continues to Drag Investment Figures
The decline in China’s investment figures has been gradually intensifying in recent months. Fixed-asset investment fell 1.6% during the first four months of 2026 and 4.1% through May. The contraction deepened to 5.7% in the first half of the year, before reaching 6.7% through July. Real estate indicators remain under pressure, with newly sold commercial building floor space decreasing by 11.8% and sales value dropping 13.1% to 4.27 trillion yuan over the seven-month span.
Despite the broader downturn, some technology-related sectors continued to attract increased investment. Investment in high-tech industries rose by 5.0% from January to July. Investment in information services climbed by 19.2%, and aerospace vehicle and equipment manufacturing expanded by 12.3%. Electronic and communication equipment manufacturing increased by 7.1%, while investment in intellectual property products grew by 9.1%. High-tech manufacturing output surged by 13.8%, and equipment manufacturing production increased by 9.7% during the same period.
Exports Continue to Outperform Domestic Spending Despite Investment Slumps
China’s merchandise trade maintained robust growth even as domestic investment figures showed signs of slowing. Total goods imports and exports reached 30.13 trillion yuan in the first seven months, representing 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 17.8% year-on-year, and imports rose by 21.2%. Online retail sales of goods and services advanced by 4.8% during the January to July period.
During the first half of 2026, China’s economy grew by 4.7% compared to the previous year. Growth slowed from 5.0% in the first quarter to 4.3% in the second quarter. Consumer prices increased by 0.5% year-on-year in July, and the surveyed urban unemployment rate stood at 5.2%. The Communist Party Politburo called in late July for enhanced counter-cyclical measures and efforts to boost domestic demand. The latest data reflected weaker readings in investment, retail sales growth, and industrial production.