SCIO briefing on China's economic performance in July 2026

Yicai:

Since the beginning of this year, the growth rate of fixed-asset investment has declined, but the structure has continued to improve. How do you assess this trend? Also, what were the new highlights in July in terms of investment in major national strategies, security capacity in key areas and high-tech industries? Which areas should be prioritized for investment going forward? Thank you.

Fu Linghui:

Thank you for your questions. Investment is indeed a topic that draws widespread attention. In the first seven months, fixed-asset investment decreased 6.7% year on year, and the decline continued to widen. This reflected the effect of high temperatures and heavy rain on project construction in some areas, along with a complex and severe external environment and the phased impact of domestic economic transformation and adjustment. When assessing the current investment situation, we should look beyond changes in the investment growth rate to the role of investment in promoting economic and social development, as well as its structure, quality and efficiency. From this perspective, since the beginning of this year, with the strengthening of innovation's leading role and the release of policy benefits, investment has played an increasingly prominent role in promoting transformation, strengthening the foundation for growth and benefiting people's livelihoods. This is evident in the following aspects:

First, investment in new growth areas has expanded in scope and improved in quality. Investment today determines future output and shapes the industrial landscape and economic efficiency of the years ahead. China is currently accelerating the transition from old to new growth drivers. Capital is rapidly flowing into advanced manufacturing, the digital economy, and green and low-carbon sectors, and enterprises are shifting their investment focus to innovation-intensive activities such as R&D and design. Data show that from January to July, investment in intellectual property products increased 9.1%, with its share of total investment up 2.1 percentage points year on year. With the expansion of demand for computing power, this momentum has passed from terminal applications up the chain to hardware manufacturing and basic materials, driving a substantial increase in investment across the entire industry. From January to July, investment rose 57.7% year on year in electronic circuit manufacturing, 9.4% in electronic specialty materials manufacturing and 11.5% in integrated circuit manufacturing, while investment in information services increased 19.2%, 3.7 percentage points faster than in the first half. The market penetration rate of NEVs continues to rise, fueling strong demand for power batteries and driving a 23% increase in investment in lithium-ion battery manufacturing. As the low-altitude economy accelerates commercialization, investment in aircraft and spacecraft manufacturing expanded by 12.3% in the first seven months. These figures show that investment momentum in new growth areas is strengthening.

Second, investment in key areas has continued to expand. The large-scale equipment renewal policy has had a significant stimulating effect, and demand for equipment purchases has continued to release. This will further raise corporate production efficiency. Equipment renewal is clearly having a positive impact on boosting corporate production and improving production efficiency. From January to July, investment in equipment and instruments increased 9%, contributing 1.5 percentage points to overall investment growth. Solid progress in implementing major national strategies and enhancing security capacity in key areas, along with the gradual improvement of the modern infrastructure system, has driven investment growth in related fields. All of this supports long-term economic development. Communication network construction has deepened. From January to July, investment rose 29.9% year on year in optical fiber manufacturing and 41.3% in internet and related services. According to data from relevant departments, 5G base stations accounted for 39.1% of all mobile base stations as of the end of June, up 0.9 percentage point from the first quarter. Steady progress has been made in expanding logistics and transportation, as well as basic energy infrastructure. In the first seven months, investment rose 16.2% in water transport, 15.7% in air transport and 16% in electricity supply infrastructure.

Third, efforts to improve people's livelihoods have been intensified. As people's needs shift from simply having basic necessities to seeking higher-quality living conditions, and from having enough food and clothing to pursuing more livable environments, China continues to increase investment in improving people's livelihoods. In the first seven months, investment rose 5.9% year on year in agriculture and 4.5% in fisheries, consolidating the foundation for food security and for industrial development under rural revitalization. The first seven months also saw ecological restoration projects advancing in an orderly manner, with the construction of small and micro urban green spaces such as "pocket parks" in full swing. Investment in environmental monitoring and treatment services grew 3% in the first seven months, making development greener and people's lives better at the same time.

Overall, China's investment structure has continued to improve, and the quality of investment has steadily risen, which will help strengthen the momentum of economic development. Moving forward, we will coordinate investment in physical assets and investment in people, better leverage the guiding and driving role of government investment, work to invigorate private investment, drive high-quality progress on major strategies and key projects, and step up spending on innovation and people's well-being, thereby creating favorable conditions for high-quality economic development. Thank you.