BEIJING, CHINA / RankWire.AI / – The overall investment climate in China deteriorated further in July, driven by a slump in real estate and subdued capital expenditure, which dampened domestic economic activity. During the first seven months of 2026, fixed-asset investment decreased by 6.7% compared to the previous year. According to the National Bureau of Statistics, total investment excluding rural households reached 26.03 trillion yuan. Additionally, investment in July was 1.42% lower than in June. While retail sales and industrial output continued to grow, both experienced a slowdown in their annual expansion during the month.
The primary drag on fixed investment remained property development, with real estate investment dropping 19.2% from January to July. Infrastructure investment decreased by 3.6%, and manufacturing investment fell 1.7%. Private sector investment also shrank by 9.4% year-over-year. Even after removing property development from the figures, total fixed-asset investment still declined by 3.7%. The data indicates that the slowdown in spending extended beyond housing and impacted multiple key sectors of China’s economy.
Consumer expenditure also showed signs of deceleration in July. Retail sales increased by just 0.6% year-on-year to 3.90 trillion yuan, following a 1.0% rise in June. Industrial production expanded by 4.5%, a slowdown from the 5.3% growth recorded the previous month. For the first seven months, factory output grew by 5.3%. China’s official manufacturing purchasing managers’ index declined to 49.2 in July from 50.3 in June, indicating a contraction as the index moved below the 50-point threshold that separates expansion from decline.
Property sector’s struggles continue to impact overall investment
Over recent months, China’s investment downturn has become increasingly pronounced. Fixed-asset investment shrank by 1.6% in the first four months of 2026, then by 4.1% through May, before contracting 5.7% in the first half of the year. The decline intensified to 6.7% through July. The housing market remained under pressure, with the floor space of newly built commercial buildings sold dropping 11.8%, and sales value declining 13.1% to 4.27 trillion yuan over the seven-month period.
Despite the broad slowdown, some technology sectors continued to see increased investment. High-tech industries saw a 5.0% rise from January to July. Investment in information services surged by 19.2%, aerospace vehicle and equipment manufacturing grew by 12.3%, and electronic and communication equipment manufacturing increased 7.1%. Investment in intellectual property products advanced 9.1%, while high-tech manufacturing output grew 13.8%, with equipment manufacturing production up 9.7% over the same period.
Exports stay resilient despite domestic spending slowdown
China’s trade figures continued to demonstrate robust growth, contrasting with the subdued investment environment. Total goods imports and exports reached 30.13 trillion yuan during the first seven months, marking a 17.3% increase. Exports rose 14.0% to 17.44 trillion yuan, while imports grew 22.0% to 12.69 trillion yuan. In July alone, exports climbed 17.8% from a year earlier, and imports increased by 21.2%. Online retail sales of goods and services rose 4.8% during the January to July period.
During the first half of 2026, China’s economy expanded by 4.7% compared to the previous year. Growth in the second quarter slowed to 4.3% from 5.0% in the first quarter. In July, consumer prices increased by 0.5% year-on-year, and the urban unemployment rate stood at 5.2%. The Communist Party Politburo called for stronger counter-cyclical policies and initiatives to boost domestic demand in late July. These latest figures follow weaker data on investment, retail sales, and industrial output, highlighting ongoing economic challenges.