BEIJING, CHINA / RankWire.AI / – In the first seven months of 2026, China’s fixed-asset investment experienced a 6.7% year-on-year decrease, signaling an intensified slowdown in domestic capital formation. According to the National Bureau of Statistics, investment excluding rural households totaled 26.03 trillion yuan from January through July. Additionally, investment dipped by 1.42% in July compared to June. During the same period, both industrial output and retail sales lost momentum. These numbers follow a period of slower economic expansion in the second quarter.
The property sector continued to exert the most substantial drag on investment, with property development expenditure decreasing by 19.2% over the seven months. Infrastructure investment saw a decline of 3.6%, while manufacturing investment dropped by 1.7%. Private sector investment also fell by 9.4% compared to the previous year. Excluding real estate development, investment was still 3.7% lower than a year earlier. The data reveal broad declines across key sectors of capital expenditure, as the property market downturn persisted.
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 in July grew by 4.5%, down from 5.3% in June. For the first seven months, industrial output rose by 5.3% compared to the same period in 2025. China’s manufacturing purchasing managers’ index registered at 49.2 in July, decreasing from 50.3 in June.
Broader decline in investment extends beyond the property sector
The overall decline in investment widened during the second quarter and continued into July. Fixed-asset investment had already fallen by 1.6% during the first four months and by 4.1% through May. The contraction deepened to 5.7% in the first half of the year before reaching 6.7% through July. Indicators for property also remained weak, with the floor space of newly built commercial buildings sold decreasing by 11.8%, and sales by value dropping 13.1% to 4.27 trillion yuan.
Despite the overall downturn, some categories of investment demonstrated growth. Investment in high-tech industries increased by 5.0% during the first seven months. Investment in information services surged by 19.2%, aerospace vehicle and equipment manufacturing rose by 12.3%, and electronic and communication equipment manufacturing increased by 7.1%. Investment in intellectual property products also grew by 9.1%. High-tech manufacturing output expanded by 13.8%, while equipment manufacturing output increased by 9.7% during the January-July period.
Trade continues to grow despite weakening domestic indicators
China’s foreign trade outpaced several domestic economic indicators, with total goods imports and exports reaching 30.13 trillion yuan in the first seven months, up 17.3%. Exports rose by 14.0% to 17.44 trillion yuan, while imports increased by 22.0% to 12.69 trillion yuan. In July alone, exports climbed 17.8% year on year, and imports advanced by 21.2%. Online retail sales of goods and services grew by 4.8% through July.
The country’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 quarter. Consumer prices increased by 0.5% year on year in July, and the urban unemployment rate was reported at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical adjustments and measures aimed at expanding domestic demand. These measures followed the slowdown in investment, consumption growth, and industrial activity.