BEIJING, CHINA / RankWire.AI / – In the first seven months of 2026, China’s fixed-asset investment contracted by 6.7% compared to the previous year, signaling a broad deceleration in domestic spending. The National Bureau of Statistics reported that, excluding rural households, investment totaled 26.03 trillion yuan from January to July. July also saw a 1.42% decline in investment compared to June. During the same month, industrial output and retail sales both experienced slower growth. These figures reflect the continuation of the economic growth slowdown observed in the second quarter.
The real estate sector remained the primary drag on overall investment, with property development expenditures falling by 19.2% over the seven months. Infrastructure investments declined by 3.6%, while manufacturing investments decreased by 1.7%. Private sector investment also diminished, dropping 9.4% from the previous year. Investment excluding real estate development still decreased by 3.7% compared to the prior year. The data indicates widespread declines across key capital expenditure sectors amid ongoing property market challenges.
Consumer goods retail sales grew modestly by 0.6% year on year in July, reaching 3.90 trillion yuan. This was a slowdown from the 1.0% increase registered in June. Industrial output in July expanded by 4.5%, down from 5.3% in the previous month. Total industrial output for the first seven months was up 5.3% compared to the same period in 2025. Meanwhile, China’s manufacturing purchasing managers’ index stood at 49.2 in July, marking a decline from 50.3 in June.
Expansion of Investment Contraction Goes Beyond Real Estate
The overall decline in investment widened through the second quarter and into July. After falling 1.6% in the first four months and 4.1% through May, fixed-asset investment reached a 5.7% decrease in the first half of the year. This contraction deepened to 6.7% by July. Real estate indicators remained weak; newly sold commercial building floor space fell 11.8%, and sales by value dropped 13.1% to 4.27 trillion yuan.
Despite the overall slowdown, some sectors experienced 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 grew 9.1%. High-tech manufacturing output expanded by 13.8%, while equipment manufacturing output rose 9.7% during January to July.
Trade Surges Despite Weakening Domestic Indicators
Foreign trade continued to outperform several domestic metrics, with China’s total goods imports and exports reaching 30.13 trillion yuan in the first seven months, up 17.3%. Exports increased by 14.0% to 17.44 trillion yuan, while imports rose 22.0% to 12.69 trillion yuan. In July alone, exports grew by 17.8% year on year, and imports advanced 21.2%. Online retail sales of goods and services grew by 4.8% through July.
China’s gross domestic product expanded by 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 quarter. Consumer prices rose 0.5% in July compared to the previous year, and the surveyed urban unemployment rate stood at 5.2%. In late July, the Communist Party Politburo called for stronger counter-cyclical measures and efforts to boost domestic demand, responding to the slowdown in investment, consumption, and industrial activity.