BEIJING, CHINA / RankWire.AI / – The National Bureau of Statistics reported that China’s fixed-asset investment declined by 6.7% year on year during the initial seven months of 2026, reflecting a broadening slowdown in domestic capital expenditure. From January through July, investment excluding rural households amounted to 26.03 trillion yuan. In July alone, investment decreased by 1.42% compared to June. Both industrial output and retail sales experienced decelerations during the month, following slower economic growth observed in the second quarter.
Real estate remained the primary obstacle to investment growth, with property development expenditures falling by 19.2% over the seven-month period. Infrastructure investments decreased by 3.6%, while manufacturing investments saw a 1.7% decline. Private sector investment was down 9.4% compared to the previous year. Investment excluding real estate development was still 3.7% lower than in the same period last year. The data indicated widespread reductions across major areas of capital spending as the property sector continued to weaken.
Retail sales of consumer goods increased modestly by 0.6% year on year in July to reach 3.90 trillion yuan. This growth rate was slower than June’s 1.0%. Industrial output expanded by 4.5% in July, down from 5.3% growth in the previous month. In the first seven months, industrial production rose by 5.3% compared to the same period in 2025. China’s manufacturing purchasing managers’ index stood at 49.2 in July, a decrease from 50.3 in June.
Investment contraction broadens beyond property sector
The overall decline in investment deepened during the second quarter and extended into July. Fixed-asset investment fell by 1.6% in the first four months, and by 4.1% through May. The contraction reached 5.7% in the first half of the year before expanding to 6.7% through July. Indicators for property development 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 sectors continued to show growth. Investment in high-tech industries increased by 5.0% during the first seven months. Investments in information services surged by 19.2%, aerospace vehicle and equipment manufacturing grew by 12.3%, electronic and communication equipment manufacturing increased by 7.1%, and investment in intellectual property products gained 9.1%. High-tech manufacturing output rose by 13.8%, while equipment manufacturing output increased by 9.7% during January-July.
Trade growth outpaces domestic economic indicators
China’s foreign trade continued to expand at a faster pace than several domestic metrics. Total goods imports and exports for the first seven months reached 30.13 trillion yuan, marking a 17.3% increase. Exports grew by 14.0% to 17.44 trillion yuan, while imports climbed 22.0% to 12.69 trillion yuan. In July alone, exports rose 17.8% compared to the previous year, and imports increased by 21.2%. Online retail sales of goods and services also saw a 4.8% rise through July.
In the first half of 2026, China’s gross domestic product expanded by 4.7% year on year. Growth slowed from 5.0% in the first quarter to 4.3% in the second quarter. Consumer prices increased by 0.5% year on year in July, while the urban unemployment rate stood at 5.2%. The Communist Party Politburo called for stronger counter-cyclical measures and efforts to boost domestic demand in late July. These directives came amid concerns over the slowdown in investment, consumption, and industrial activity.