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, reflecting an overarching slowdown in domestic capital expenditure. According to the National Bureau of Statistics, investment excluding rural households reached 26.03 trillion yuan from January to July, with a 1.42% decrease in July from June. During the same month, industrial output and retail sales both decelerated, following a slower economic growth rate in the second quarter.
The real estate sector remained the primary contributor to the investment decline, with property development spending dropping 19.2% over the seven-month period. Infrastructure investment decreased by 3.6%, while manufacturing investment fell 1.7%. Private sector investment declined 9.4% year-on-year. Despite this, investment excluding real estate development was still 3.7% lower than the previous year. The data indicated widespread decreases in key capital expenditure sectors amid the ongoing property market downturn.
Retail sales of consumer goods increased by 0.6% year-on-year in July to 3.90 trillion yuan, a slowdown from June’s growth of 1.0%. Industrial output grew by 4.5% in July, compared to 5.3% in the previous month. Over the first seven months, industrial output rose by 5.3% compared to the same period in 2025. China’s manufacturing purchasing managers’ index was 49.2 in July, down from 50.3 in June.
Broader contraction extends beyond property investment
Investment declines widened during the second quarter and into July, following a 1.6% fall in the first four months and a 4.1% decrease through May. The contraction reached 5.7% in the first half of the year before expanding to 6.7% through July. Property sector indicators remained weak; newly built commercial building floor space sold declined 11.8%, and sales by value dropped 13.1% to 4.27 trillion yuan.
Certain investment categories, however, continued to report growth amid the overall slowdown. High-tech industry investment increased by 5.0% during the first seven months. Investment in information services rose 19.2%, aerospace vehicle and equipment manufacturing grew 12.3%, and electronic and communication equipment manufacturing increased 7.1%. Investment in intellectual property products gained 9.1%. During January-July, high-tech manufacturing output increased by 13.8%, and equipment manufacturing output grew by 9.7%.
Trade outpaces domestic activity as economy slows
Foreign trade continued to expand at a faster pace than many domestic indicators, with total goods imports and exports reaching 30.13 trillion yuan in the first seven months—up 17.3%. Exports rose 14.0% to 17.44 trillion yuan, while imports increased 22.0% to 12.69 trillion yuan. In July alone, exports grew 17.8% from a year earlier, and imports advanced 21.2%. Online retail sales of goods and services climbed 4.8% through July.
China’s gross domestic product grew 4.7% year on year in the first half of 2026. Growth slowed to 4.3% in the second quarter from 5.0% in the first. Consumer prices increased 0.5% in July, and the urban unemployment rate stood at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and policies to boost domestic demand, following a slowdown in investment, consumption, and industrial activity.