Private investment shrinks while China's state spending tries to fill the gap

China's total fixed asset investment fell by 1.6% in the first four months of 2026, driven by a significant drop in private and foreign capital. State-controlled enterprises and infrastructure projects are now the main source of new spending.

Private businesses and foreign companies are pulling back on long-term spending in China. This means the government and state-owned enterprises are increasingly responsible for driving economic growth through infrastructure and industrial projects. The data shows a clear shift in who is willing to bet on China's future.