China’s total fixed‑asset investment (excluding rural households) slipped to RMB 485,186 billion in 2025, a year‑on‑year decline of 3.8% by comparable measures. In dollar terms this is roughly RMB 48.5 trillion (about $6.9 trillion at a mid‑2025 exchange rate), underscoring how a modest percentage fall in a very large base still represents a sizable reduction in demand for capital goods and construction.
The composition of the slowdown is telling. Investment in the tertiary sector — services — contracted sharply, down 7.4%, while secondary‑sector investment (industry and construction) edged up 2.5% and primary (agriculture) rose 2.3%. Within industry, manufacturing barely expanded (0.6%), mining grew 2.5% and utilities (power, heat, gas and water) surged 9.1%, indicating a divergence between energy‑related capital projects and broader private industrial spending.
The private and foreign legs of China’s capital formation were hit particularly hard. Private fixed‑asset investment fell 6.4% overall, and investment by foreign firms plunged 13.8%, with firms registered in Hong Kong, Macau and Taiwan also down 2.2%. Regional patterns show that traditional growth poles were not immune: the eastern provinces recorded an 8.4% fall, the northeast plunged 15.5%, the central region declined 2.7% and the west eased by 1.3%.
Some parts of the infrastructure ledger bucked the trend even as overall infrastructure investment (excluding utilities) fell 2.2%. Pipeline transport investment jumped 36.0%, multimodal transport and freight agency investment rose 22.9%, and waterborne transport climbed 7.7%. The strong gains in transport‑and‑energy corridors suggest targeted state and corporate spending, particularly in logistics and energy transmission, while broader public capital projects and property‑linked investment remain weak.
Monthly momentum eroded late in the year: December’s fixed‑asset investment declined 1.13% from the prior month, reinforcing that the weakness was not confined to one-off timing effects. The data point to a cycle in which consumption and services demand are insufficient to absorb capacity, private confidence remains fragile, and global headwinds are depressing foreign capital flows into China.
For policy‑makers the numbers pose a familiar dilemma. The state can shore up activity by accelerating public infrastructure and energy projects, as seen in pockets of robust spending, but large fiscal injections risk worsening already elevated local‑government leverage. Supporting private investment requires both demand stimulus and structural reforms to restore returns and reduce policy uncertainty — measures that are harder and slower to deliver than headline infrastructure spending.
Investors and trading partners should read the 2025 figures as evidence that China’s rebalancing toward services and consumption is proceeding unevenly. The pronounced weakness in private and foreign investment, combined with regional disparities and only tentative industrial growth, suggests that growth in 2026 will rely on a mix of selective state support, targeted deregulation to revive private capex, and external demand — all of which carry execution and geopolitical risks.