China’s investment boom breaks: November data shows historic slowdown

China’s investment activity slowed sharply in November, pushing the world’s second-largest economy closer to its first annual decline in investment in more than 30 years, according to official data and independent estimates.

Fixed-asset investment—covering housing, public infrastructure and manufacturing—fell 2.6 per cent from January through November compared with the same period last year, China’s National Bureau of Statistics said on December 15. Research firm Capital Economics estimated that investment dropped 11.1 per cent in November from a year earlier, marking a second consecutive month of double-digit declines in 2024, The New York Times writes. 

If confirmed for the full year, the downturn would mark a historic shift. For more than three decades, investment in buildings, public works and factories had risen every year since the late 1980s, underpinning China’s rapid economic expansion.

The pullback, which began in the second half of the year, reflects growing caution about China’s economic outlook. Investment in real estate—once a central pillar of growth—continued to fall sharply in November. Spending on public infrastructure and manufacturing also declined, resulting in a rare contraction across all three major components of fixed-asset investment.

Economists say the broad-based nature of the slowdown highlights multiple structural challenges. A prolonged property crisis has undermined confidence and reduced land-sale revenues, limiting local governments’ ability to fund infrastructure projects. At the same time, Beijing’s campaign to rein in what it calls excessive competition has weighed on investment, even in fast-growing manufacturing sectors.

Speaking at a news conference on December 15, Fu Linghui, spokesman and chief economist of the National Bureau of Statistics, said that despite the overall decline, investment in certain priority areas remained resilient. He noted that investment in sectors such as clean energy technology continued to grow, helping to support medium- and long-term economic prospects.

Chinese policymakers have indicated that stabilizing investment and reversing the downturn will be key priorities in the coming year. However, analysts remain cautious about the outlook.

“Policy support should help drive a partial recovery in the coming months, but this probably won’t prevent China’s growth from remaining weak across 2026 as a whole,” Zichun Huang, China economist at Capital Economics, wrote in a note on December 15.

Other economic indicators released alongside the investment data pointed to continued weakness. Retail sales, a key measure of consumer spending, rose 1.3 per cent in November, the slowest growth rate in nearly three years.

The property sector also delivered fresh signs of stress. China Vanke, one of the country’s largest real estate developers, failed to secure approval for a plan to delay repayment of a bond due on December 15, bringing it closer to default.

In a December 15 filing with the Hong Kong Stock Exchange, Vanke said it has a “grace period” of five working days after missing a scheduled payment and plans to convene another meeting of bondholders during that time.

By Sabina Mammadli