BEIJING, CHINA / RankWire.AI / – In the first seven months of 2026, China’s fixed-asset investment decreased by 6.7% compared to the previous year, indicating a broadening slowdown in domestic spending. According to the National Bureau of Statistics, investment excluding rural households reached 26.03 trillion yuan from January through July. Furthermore, investment in July dropped by 1.42% compared to June. During the same month, both industrial output and retail sales experienced deceleration. These figures follow a period of slower economic growth in the second quarter.
The real estate sector continued to be the primary drag on overall investment, with property development expenditures falling by 19.2% over the seven-month span. Infrastructure spending declined by 3.6%, while manufacturing investment decreased by 1.7%. Private sector investment saw a drop of 9.4% year on year. Investment excluding real estate development was still 3.7% lower than the previous year. The data revealed declines in several key areas of capital expenditure, reflecting the ongoing property market downturn.
Retail sales of consumer goods increased by 0.6% year on year in July, reaching 3.90 trillion yuan. This growth rate slowed from 1.0% in June. Industrial output expanded by 4.5% in July, down from 5.3% in the previous month. For the first seven months, output was up 5.3% compared to the same period in 2025. The manufacturing purchasing managers’ index stood at 49.2 in July, a decrease from 50.3 in June.
Broader Investment Contraction Extends Beyond Property Sector
The overall decline in investment widened during the second quarter and 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 remained notably weak, with the floor space of newly sold commercial buildings dropping 11.8% and sales by value decreasing 13.1% to 4.27 trillion yuan.
Despite the overall slowdown, some sectors continued to report growth. Investment in high-tech industries increased by 5.0% over the first seven months. Investment in information services climbed 19.2%, and aerospace vehicle and equipment manufacturing rose by 12.3%. Manufacturing of electronic and communication equipment grew by 7.1%, while investment in intellectual property products gained 9.1%. During January-July, high-tech manufacturing output rose by 13.8%, and equipment manufacturing increased by 9.7%.
Trade Surges Amidst Weakening Domestic Economic Indicators
Foreign trade continued its upward trajectory, surpassing some domestic indicators. In the first seven months, China’s total goods imports and exports reached 30.13 trillion yuan, reflecting a 17.3% increase. Exports rose by 14.0% to 17.44 trillion yuan, while imports grew 22.0% to 12.69 trillion yuan. In July alone, exports increased by 17.8% year on year, and imports went up by 21.2%. Online retail sales of goods and services also saw a 4.8% rise through July.
China’s gross domestic product grew by 4.7% year on year during the first half of 2026. Growth slowed to 4.3% in the second quarter from 5.0% in the first. Consumer prices increased by 0.5% in July compared to the same month last year. The surveyed urban unemployment rate stood at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical adjustments and measures to expand domestic demand. These measures were prompted by the slowdown in investment, consumption, and industrial activity.