China’s economy shows sluggish start in second half of 2026

China’s economic engines cooled sharply as the country crossed into the second half of 2026, with factory output, consumer spending, and investment all falling short of expectations. The National Bureau of Statistics released data on August 17 covering the first seven months of the year, and the numbers painted a picture of an economy straining to maintain momentum well below the surface of official confidence. The NBS described the economic situation as one of “steady momentum” and “high-quality development” in the same breath as acknowledging persistent domestic imbalances and weak demand. The numbers behind the slowdown Industrial value-added output grew 5.3% year-on-year across the January-to-July stretch, but July’s standalone reading dropped to 4.5%, with a month-on-month gain of just 0.11%. Total retail sales of consumer goods reached RMB 28.77 trillion through July, up just 1.2% year-on-year. July alone posted only 0.6% growth, logging RMB 3.90 trillion in sales. Fixed-asset investment fell 6.7% year-on-year through July, totaling RMB 26.03 trillion. Real estate development investment dropped 19.2% over the same period. Private investment fell 9.4%. The manufacturing Purcha...