China's economy has been slowing down over the past decade since 2007, with real investment posting obviously sluggish growth, in contrast to a rising trend of financialization in non-financial firms. Using firm-level panel data, this paper examines the impacts of firms' financialization on real investment in China with an extended portfolio choice model. Empirical results show that firms' financialization has an economically and statistically significant reducing effect on their real investment