BEIJING, CHINA / RankWire.AI / – In the first seven months of 2026, China’s fixed-asset investment declined by 6.7% compared to the previous year, signaling a broader slowdown in domestic spending. The National Bureau of Statistics reported that investment excluding rural households reached 26.03 trillion yuan from January to July. Additionally, investment decreased by 1.42% in July compared to June. Both industrial output and retail sales lost momentum during the month, following a period of slower economic growth in the second quarter.
Property development remained the primary factor dragging down overall investment, with spending in real estate down 19.2% over the seven-month span. Infrastructure investment saw a decline of 3.6%, while manufacturing investment dropped by 1.7%. Private sector investment fell by 9.4% year on year. Excluding real estate development, investment still decreased by 3.7% compared to the previous year. These figures reflect widespread declines across key capital expenditure categories amid ongoing weakness in the property market.
Retail sales of consumer goods grew modestly by 0.6% year on year in July, reaching 3.90 trillion yuan. This growth rate slowed from June’s 1.0%. Industrial production expanded by 4.5% in July, down from 5.3% in the previous month. The total output for the first seven months increased by 5.3% relative to the same period in 2025. China’s manufacturing purchasing managers’ index (PMI) stood at 49.2 in July, a decline from 50.3 in June.
Widening Investment Contraction Extends Beyond Property
The overall decline in investment deepened during the second quarter and into July. After falling 1.6% in the first four months and 4.1% through May, fixed-asset investment decreased by 5.7% in the first half of the year. The contraction intensified to 6.7% through July. The property sector remained weak; newly built commercial building floor space sold dropped 11.8%, and sales by value declined 13.1% to 4.27 trillion yuan.
Despite the overall downturn, some sectors continued to show growth. Investment in high-tech industries increased by 5.0% over the first seven months. Investment in information services rose 19.2%, and aerospace vehicle and equipment manufacturing grew by 12.3%. Electronic and communication equipment manufacturing expanded by 7.1%, while investment in intellectual property products gained 9.1%. High-tech manufacturing output climbed 13.8%, and equipment manufacturing increased by 9.7% during January to July.
Trade Surges While Domestic Data Shows Weakening Trends
Foreign trade continued to outpace several domestic indicators. China’s total goods imports and exports reached 30.13 trillion yuan during the first seven months, representing a 17.3% increase. Exports rose 14.0% to 17.44 trillion yuan, and imports grew 22.0% to 12.69 trillion yuan. In July alone, exports increased by 17.8% from a year earlier, and imports advanced by 21.2%. Online retail sales of goods and services grew 4.8% through July.
China’s gross domestic product expanded by 4.7% year on year in the first half of 2026. However, growth slowed to 4.3% in the second quarter from 5.0% in the first. Consumer prices increased by 0.5% year on year in July, and the urban unemployment rate stood at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical policies and measures to expand domestic demand, responding to the slowdown in investment, consumption, and industrial activity.