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Current Chinese Economic Report Series

China’s
Macroeconomic
Outlook
Quarterly Forecast and Analysis Report,
October 2018
Current Chinese Economic Report Series
Editorial Board

Editorial Staff

Lianshui Li, Zhanyuan Du, Zaiwu Gong, Caihua Yu, Caihong Zhou, Jun Lin,
Wei Sun, Changping Xu, Minjie Wu, Nian Zhong, Feixue Zhou, Changkai Wang,
Mingyang Zhang, Yulin Chen, Zhonghua Cheng

More information about this series at http://www.springer.com/series/11028

Center for Macroeconomic Research

China’s Macroeconomic
Outlook
Quarterly Forecast and Analysis Report,
October 2018
By the China’s Quarterly Macroeconometrtic
Model (CQMM) Team

123
Center for Macroeconomic Research
Xiamen University
Xiamen, Fujian, China

ISSN 2194-7937 ISSN 2194-7945 (electronic)

Current Chinese Economic Report Series
ISBN 978-981-13-6076-3 ISBN 978-981-13-6077-0 (eBook)
https://doi.org/10.1007/978-981-13-6077-0

Library of Congress Control Number: 2018930244

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Preface

This report is a partial result of the China’s Quarterly Macroeconometric Model

(CQMM), a project developed and maintained by the Center for Macroeconomic
Research (CMR) at Xiamen University. The CMR is one of the Key Research
Institutes of Humanities and Social Sciences sponsored by the Ministry of
Education of China, focusing on China’s economic growth and macroeconomic
policy. The CMR started to develop the CQMM for the purpose of short-term
forecasting, policy analysis, and simulation in 2005.
Based on the CQMM, the CMR and its partners hold press conferences to
release forecasts for China’ major macroeconomic variables. Since July 2006, 24
quarterly reports on China’s macroeconomic outlook have been presented and 11
annual reports have been published.
This 25th quarterly report was presented at the Forum on China’s
Macroeconomic Outlook and Press Conference of CQMM on October 25, 2018.
This conference was jointly held by SOAS London University, Xiamen University,
and Economic Information Daily in London, UK.

Xiamen, China Center for Macroeconomic Research

Xiamen University

v
Acknowledgements

According to the Chinese Pinyin order of their names, the 110 experts who joined
this questionnaire survey were: Bai Peiwen, Chang Xin, Chen Changbing,
Chen Gong, Chen Heng, Chen Jianbao, Chen Jinmei, Chen Kunting, Chen Langnan,
Chen Lei, Chen Menggen, Chen Shoudong, Chen Yanbin, Chen Zhiyong,
Dai Kuizao, Deng Xiang, Dong Ximiao, Dong Zhiyong, Fan Conglai, Fan Ziying,
Gao Bo, Guo Qiyou, Guo Xibao, Guo Xiaohe, Guo Zhiyi, Han Zhaozhou, He
Jingtong, Hu Ridong, Huang Jianhui, Huang Xianfeng, Jian Xinhua, Jiang Yongmu,
Li Chunqi, Li Haizheng, Li Jianwei, Li Jun, Li Junsheng, Li Shi, Li Xuesong,
Li Yingdong, Lin Xuegui, Liu Jianping, Liu Jinquan, Liu Qiongzhi, Liu Shiguo,
Liu Xiaoxin, Liu Zhibiao, Ma Ying, Peng Shuijun, Peng Suling, Chu Wan-wen,
Ren Baoping, Ren Ruoen, Shao Yihang, Shen Kunrong, Shen lisheng, Shi Jinchuan,
Su Jian, Sun Wei, Qin Wei, Tang Jijun, Wang Tongsan, Wang Yida, Wang
Guocheng, Wang Jiping, Wang Junbo, Wang Liyong, Wang Shusheng, Wang
Yanxing, Wang Yuesheng, Wen Chuanhao, Wu Kaichao, Wu Xinru, Xian
Guoming, Xie Pan, Xu Bin, Xu Wenbin, Yan Ping, Yang Chengyu, Yang Cuihong,
Yao Huiqin, Ye Chusheng, Yi Xianrong, Yin Xingmin, Yu Li, Yu Zuo, Yuan
Fuhua, Zang Xuheng, Zeng Wuyi, Zhang Fan, Zhang Hongliang, Zhang Liqun,
Zhang Liancheng, Zhang Long, Zhang Mingzhi, Zhang Ping, Zhang Shuguang,
Zhao Changhui, Zhao Xindong, Zhao Zhenquan, Zhao Zhijun, Zheng Chaoyu,
Cheng Yuk-Shing, Zhong Chunping, Zhou Liqun, Zhou Zejiong, Zhu Baohua, Zhu
Jianping, Zhu Qigui, and Zhuang Zongming.
The experts who joined this questionnaire survey are from institutions like
Department of Macroeconomic Research of DRC (Development Research Center
of the State Council), Center for Forecasting Science of CAS (Chinese Academy
of Sciences), Academy of Mathematics and Systems Science of CAS, Institute of
Finance and Banking of CASS, Institute of Economics of CASS, Institute of
Quantitative and Technical Economics of CASS, National Academy of Economic
Strategy of CASS, Institute of World Economy and Politics of CASS, Ministry of
Commerce, Ministry of Finance, Hengfeng Bank, Minsheng Bank, The
Export-Import Bank of China, China Banking Association, Taiwan Academia Sinica,

vii
viii Acknowledgements

Chung-Hua Institution for Economic Research, Tianze Institute of Economic

Research and universities like Xiamen University, Shanghai University of
International Business and Economics, the University of Hong Kong, Fujian Normal
University, Liaoning University, Zhejiang University of Technology, Lingnan
College of Zhongshan University, Dongbei University of Finance and Economics,
Beijing Normal University, Jilin University, Renmin University of China, Zhongnan
University of Economics and Law, Zhejiang University of Finance and Economics,
Sichuan University, Peking University, Nanjing University, Shanghai University of
Finance and Economics, Wuhan University, East China Normal University, Lanzhou
University, Jinan University, Nankai University, Huaqiao University, Hunan
University, Georgia Institute of Technology, Central University of Finance and
Economics, Xi’an Jiaotong University, National Taiwan University, Northwest
University, Beihang University, Zhejiang University, Guangxi University, Tianjin
University of Commerce, City University of Hong Kong, Chongqing Technology and
Business University, Southwestern University of Finance and Economics, Shaanxi
Normal University, China Europe International Business School, Fudan University,
Tianjin University of Finance and Economics, Shandong University, Hong Kong
Baptist University, Capital University of Economics and Business, Huazhong
University of Science and Technology, Anhui University of Finance and Economics,
Shanghai Jiao Tong University, The Hong Kong University of Science and
Technology.
Finally, we thank for the active participation and insights of these experts
mentioned above sincerely.
Grants: The major projects of China National Social Science Foundation
(15ZDC011, 13&ZD029), the major research projects of philosophy and social
sciences of China’s Ministry of Education (16JZD016, 15JZD016, 14JZD011), the
key research projects of the Key Research Institutions of Humanities and Social
Sciences of China’s Ministry of Education (18JJD79007, 18JJD790008,
17JJD790014), the general project and the youth project of China National Social
Science Foundation (17BJY086, 15BJL008), the youth project of China Natural
Science Foundation (71503222).
Contents

1 China’s Economic Performance in the First Half of 2018 . . . . . . . .. 1

1.1 GDP Growth Declined Slightly, and Consumption Was
Still the Main Driver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1
1.2 Consumption Growth Slowed Down, and Motor Vehicles
Consumption Became the Main Factor . . . . . . . . . . . . . . . . . . .. 2
1.3 The Growth of Investment in Manufacturing Edged up, While
the Growth of Infrastructure Investment Declined Significantly
and that of Investment in Real Estate Development Maintained
Stable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 6
1.4 The Trade Surplus Shrunk Significantly, While the Trade
Surplus with the US Kept Rising . . . . . . . . . . . . . . . . . . . . . . . .. 10
1.5 The CPI Remained Low and the PPI Rebounded Slightly . . . . . .. 11
1.6 The Grow Rate of M2 Hit a New Low, and Shrinking
Non-standard Financing Suppressed Social Financing . . . . . . . . .. 12
1.7 The Growth Rate of Fiscal Revenues Was Relatively High,
and that of Land Transfer Income Continued to Rise . . . . . . . . .. 13
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15
2 Quarterly Forecast for 2018–19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.1 Assumptions on Exogenous Variables . . . . . . . . . . . . . . . . . . . . . 17
2.1.1 GDP Growth of the US and the Euro Zone . . . . . . . . . . . . 17
2.1.2 The Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1.3 The Broad Money Supply (M2) . . . . . . . . . . . . . . . . . . . . 19
2.2 Scenarios Planning to Simulate the Impact of Sino-US
Trade Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 19
2.3 Quarterly Forecast of China’s Key Macroeconomic Indicators
in 2018–19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3.1 Projected GDP Growth . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.3.2 Projected Growth of Exports and Imports . . . . . . . . . . . . . 23
2.3.3 Projected Growth of Investment . . . . . . . . . . . . . . . . . . . . 25

ix
x Contents

2.4 Projected Growth of Other Key Macroeconomic Indicators . . . . . . 27

2.4.1 Projected Growth of Key Price Indicators . . . . . . . . . . . . . 27
2.4.2 Projected Growth of Residents’ Income
and Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3 Policy Simulation: Effects of Changes in the Household Debt
Ratio on China’s GDP Growth . . . . . . . . . . . . . . . . . . . .......... 31
3.1 Changes in the Household Debt Ratio . . . . . . . . . . . .......... 33
3.2 The Transmission Path of the Household Debt Ratio
Affecting Macroeconomic Operation . . . . . . . . . . . . .......... 36
3.3 Scenario Simulation and Result Analysis . . . . . . . . . .......... 38
4 Policy Implications and Suggestions . . . . . . . . . . . . . . . . . . . . . . . . . 43
Appendix: Report on the Questionnaire Survey on China’s
Macroeconomic Situation and Policy in 2018 . . . . . . . . . . . . . 49
Principal Investigator

Min Gong

Research Team Members

Changlin Yu, Guifu Chen, Huakun Wu, Jing Li, Shengrong Lu, Yanwu Wang,
Yu Liu, Zhiyuan Lin
The Chinese edition of this report is contributed to Min Gong, Huakun Wu,
Yanwu Wang, Zhiyuan Lin, and Guifu Chen. It is revised by Min Gong and
translated by Zhiyuan Lin and Guifu Chen. The raw data are processed by
Huakun Wu.

xi
Executive Summary

In the first half of 2018, China’s real GDP grew by 6.8% YoY, indicating that the
Chinese economy continued its steady growth. Driven by the rapid growth of
exports, manufacturing investment and private investment maintained a good
momentum of development, and consumption continued to be the main driving
force for economic growth. On the supply side, in addition to the steady GDP
growth, the growth rate of the industrial value added also stays stable in the range of
6.6*6.9%. The Chinese economy showed considerable resilience. In the first half
of 2018, China’s economic performance was manifested in the following aspects:
(a) GDP growth declined slightly, and consumption was still the main driver;
(b) consumption growth slowed down, and motor vehicles consumption became the
main factor; (c) the growth of investment in manufacturing edged up, while the
growth of infrastructure investment declined significantly and that of investment in
real estate development maintained stable; (d) the trade surplus shrunk significantly,
while the trade surplus with the USA kept rising; (e) the CPI remained low, and the
PPI rebounded slightly; (f) The growth rate of broad money (M2) hit a new low,
and shrinking nonstandard financing suppressed social financing; (g) the growth
rate of fiscal revenue was relatively high, and that of land transfer income continued
to rise.
However, since the third quarter of 2018, the downward pressure on the Chinese
economy has begun to increase. First, in terms of investment, the growth of
investment continued to drop sharply. Affected by strengthening financial super-
vision and rectifying the financial order, contracting credit supply, and almost
closing of sources of funds other than domestic loans, the growth rate of infras-
tructure investment fell sharply to 7.3% in the first half of 2018, down 13.8% points
compared with the same period of the previous year. And that of real estate
development dropped to only 4.6%, down 6.6% points over the same period last
year. As the growth of manufacturing investment continued to slow down, the
investment in fixed assets (excluding farmers) in the whole society increased by
6.0%, a sharp decline of 2.6% points from the same period of the previous year.
Second, in terms of foreign trade, the trade dispute unilaterally provoked by the
USA has not only disrupted the world trade order, but also begun to impact China’s

xiii
xiv Executive Summary

foreign trade. Although in the short run the Sino-US trade dispute would have
limited negative impact on China’s GDP growth through trade channels, in the long
run it would have a relatively significant impact on private investment oriented by
manufacturing exports and even reverse the upward trend of the private investment
growth.
Finally, in terms of consumption, as the growth of residents’ real income con-
tinued to edge down, coupled with the rapid increase in housing loans in the past
two years and markedly increasing household debt ratio, it would be difficult for the
growth of household consumption spending to improve quickly.
In view of the current complicated international economic situation, we design
two different scenarios of Sino-US the trade disputes: Namely, Scenario 1: from the
end of the year to next, the Sino-US trade disputes would no longer escalate. As a
result, China and the USA implement the scale of duties and the tariff rates that
have been announced; and Scenario 2: the trade disputes would further escalate.
And thus, both sides would not only expand the scale of duties, but also increase the
punitive tariff rates. Based on the China’s Quarterly Macroeconometric Model
(CQMM), we conduct forecasts on the key indicators of China’s macroeconomics
this year and next. The results show that, due to the trade transfer effect, China’s
current foreign trade with the characteristic of processing trade, and China’s
macroeconomic policies to stabilize economic growth, the negative impact of
Sino-US the trade disputes on China’s GDP growth via trade channels in the short
run would be limited, and the downward pressure on China’s economic growth
would be largely due to slowdown in the growth of investment and consumption.
In the above two scenarios, the prediction results of the CQMM are given as
follows:
1. In 2018, China’s GDP growth rate is expected to fluctuate in the range of
6.58*6.64%, 0.26*0.32% points lower than that in 2017. In 2019, it is pro-
jected to drop further to the range of 6.42*6.48%. Quarterly, in the fourth
quarter of 2018 it is set to fall back to the range of 6.23*6.46% and in the first
quarter of 2019 drop further to the range of 6.20*6.36%. In these two quarters
China’s GDP growth is anticipated to be most affected by the trade shocks.
Since then, due to the trade transfer effect, the corresponding decline in the
growth of imports induced by the fall in the growth of exports, and China’s
macroeconomic stabilizing policies, the GDP growth is expected to edge up.
2. In 2018, the growth rate of the value of exports measured by the current RMB
prices is projected to remain in the range of 8.72*9.08%, down 1.72*2.08%
points compared with 2017. In 2019, it is forecast to stay at the interval of
9.08*10.02%. In 2018, the growth rate of the value of imports measured at
current RMB prices is anticipated to fluctuate in the range of 16.99*17.13%,
down 1.57*1.71% points compared with that in 2017. In 2019, it is set to drop
to the interval of 14.04*14.88%.
3. It is noteworthy that since exports from non-SOEs (including private enterprises
and foreign-invested enterprises) account for nearly 90% of China’s total
exports, the Sino-US trade disputes would directly impact investment by
Executive Summary xv

non-SOEs that are oriented toward manufacturing exports. The CQMM predicts
that under the above two scenarios, the growth rate of investment by non-SOEs
is projected to remain in the range of 7.95*8.14% in 2018. In 2019, it is
expected to drop significantly to the interval of 4.12*4.62%. Since private
investment accounts for over 60% of total investment in the whole society, the
Sino-US the trade disputes would curb and reverse the rapid rebound in the
growth of private investment since 2017. As a result, the growth rate of
investment in fixed assets (excluding farmers) in the whole society measured at
current prices in 2018 is forecast to stay in the range of 5.49*5.61%, lower than
the level of 7.2% in 2017. In 2019, it is anticipated to further drop to the interval
of 4.15*4.45%.
4. In 2018, the CPI is expected to rise by 2.09%, an increase of 0.49% points over
2017. In 2019, the relatively loose monetary policy is projected to boost the
increase of CPI to 2.50%. In 2018, the increase of PPI is forecast to rise by
3.09%, down 3.21% points over 2017. In 2019, it is set to further fall to 1.16%.
Overall, the inflation rates would still be controllable this year and next.
5. Due to the slowdown in the growth of labor productivity, the residents’ real
income growth is still in the downward trend. In 2018, the per capita disposable
income of urban residents is expected to go up by 5.73%, a decrease of 0.77%
points compared with that in 2017. In 2019, it is projected to rebound to 6.06%.
Meanwhile, the per capita cash income of rural residents in 2018 is anticipated
to pick up by 9.21, 0.75% points lower than that in 2017, and further decline to
8.18% in 2019. The total retail sales of social consumer goods measured at
current prices are set to expand by 9.34%, down 0.96% points over 2017. In
2019, it is forecast to rebound to 9.74%, but still lower than that in 2017.
In addition, in view of the rapid expansion of China’s household debt scale and
the rapid increase in debt ratio, based on the CQMM, we conducted a counterfactual
analysis of the impact of changes in the household debt ratio on China’s household
consumption, investment, and economic growth. The transmission mechanism is
described as follows: The change in the household debt ratio will directly affect
both the household loans and the household deposits. On the one hand, changes in
the household deposits will change the price of funds, i.e., interest rate, through
changes in demand for funds, and thus change the investment demand of enterprises
with different ownership. This is the so-called investment channel that changes the
household debt ratio and affects investment demand. On the other hand, changes in
household debt ratios will directly affect household consumption and household
deposits; this is the so-called consumption channel that changes in household debt
ratio affect consumer spending. And when changes in the household debt ratio
affect household deposits, the loan-to-deposit ratio of the funds market will change
the price of funds, which in turn will affect the investment.
Assume that the household debt ratio in 2016 and 2017 remains at the level of
38.8% in the fourth quarter of 2015, which are 5.6 and 9.6% points lower than those
in the actual situation. The counterfactual analysis based on the CQMM shows that
the consumption channel effect of changes in the household debt ratio would be
xvi Executive Summary

stronger than the investment channel effect, indicating that suppressing the increase
in the household debt ratios would be conducive to accelerating the growth of
consumer spending. Nonetheless, the decline in the household debt ratio would
result in a decline in the growth of household saving deposits, which in turn would
reduce the supply of credit funds and increase the price of funds, resulting in a
decline in investment growth, especially of private enterprises lacking diversified
financing instruments. Combining the above two effects, the decline in the
household debt ratio would eventually increase the economic growth rate slightly.
In 2016 and 2017, China’s GDP growth would increase by 0.01 and 0.06% points,
respectively, compared with the baseline value. Although reducing the household
debt ratio would have only a weak effect on economic growth, it would be con-
ducive to promoting the structural adjustment of the economy.
In summary, in the face of the downward pressure on China’s current economy,
there are two issues that deserve high attention: The first is the negative impact
of the current trade disputes on private investment and manufacturing investment,
and the second is the negative impact of the rapid rise in the household debt ratio to
household consumption growth.
First, we should pay much attention to the negative impact of the current
Sino-US trade disputes on private investment and manufacturing investment.
If the growth of private investment would not substantially rebound, the slowdown
in the growth of investment in fixed assets in the whole society would curb eco-
nomic growth. With the economic slowdown, the local government’s demand for
infrastructure expansion and its dependence on land finance, as well as the financial
sector’s preference for SOEs and the real estate industry, would come back. And it
would be difficult to reverse the situation that credit resources are deviating from the
real economy to the virtual economy or idling within the financial system.
Therefore, if the Sino-US trade war continued to escalate, while preventing and
controlling financial risks, it would be necessary to effectively stimulate private
investment, improve resource allocation efficiency, promote the transformation and
upgrading of China’s manufacturing industry, and improve labor productivity.
To this end, we propose the following suggestions:
a. While controlling the total amount, monetary policy should pay attention to
maintaining a reasonable and sufficient liquidity and focus on adjusting the
credit structure to ensure that the proportion of loans to non-financial enterprises
and government organizations is stable at more than 50%, so as to we reverse
the situation that credit resources are deviating from the real economy to the
virtual economy.
b. Full consideration should be given to the financial risks and market tolerance
faced by de-leveraging policies. While grasping the supervision efforts, we
should coordinate the timing of the introduction of various policies and improve
the linkage of financial supervision systems at all levels. Preventing financial
risks and serving the real economy should be parallel. In addition, effectively
improve the ability and willingness of financial services to the real economy.
Executive Summary xvii

c. Continue to implement active fiscal policy, adopt measures such as tax cut and
fee reduction, and cooperate with monetary policy to ensure that liquidity
actually enters the real economy. Meanwhile, stimulate the development of
small- and medium-sized enterprises and promote the upgrading of industrial
structure.
Second, we should pay much attention to the negative impact of the rapid
rise in the household debt ratio to household consumption growth. China’s
household debt ratio has surpassed the average of emerging economies in 2011 and
has since gradually widened the gap. The difference with developed countries has
also shrunk dramatically. Under the background of China’s aging population, the
far from perfect social security system, and the still grim urban-rural income gap,
especially as the growth of the residents’ real income edges down due to the
slowdown in labor productivity growth, the rapidly rising household debt ratio will
slow the growth of household consumption and hinder the transformation of eco-
nomic growth patterns.
To this end, we put forward the following suggestions:
a. As the unprecedented expansion of the current housing loan scale is the main
reason for the sharp increase in the household debt ratio, we should vigorously
rectify various irregularities in loans for real estate development. While limiting
domestic loans flow into real estate investment, we should continue developing
the housing leasing market and promote the equilibrium of supply and demand
in the regional housing market.
b. Further promote the reform of the fiscal system to help local governments get rid
of their dependence on land finance. In the past decade, as the impact of the
global financial crisis led to a sharp decline in the growth rate of profits of
industrial enterprises, the growth rate of fiscal revenues with the industrial tax as
the main source of taxation also fell sharply. Local governments have therefore
begun to increase their reliance on land finance, which directly pushed up the
bubble in real estate. In order to reverse the current situation that local gov-
ernments depend on land finance, the implementation of real estate tax is
imperative. In addition, the reform and improvement of the fiscal system should
ensure the matching of the local government financial resources and expenditure
responsibilities.
Chapter 1
China’s Economic Performance
in the First Half of 2018

In the first half of 2018, China’s real GDP grew by 6.8% YoY, showing that the
Chinese economy continued its steady growth. Although the growth rate of invest-
ment and consumption, which are measured by the investment in fixed assets (FAI)
in the whole society and the total retail sales of social consumer goods, respectively,
dropped to the lowest in recent years, the domestic demand reflected by total asset
formation and final consumption expenditure was not weak.1 On the supply side, in
addition to the steady GDP growth, the growth rate of the industrial added value also
stayed stable at the interval of 6.6–6.9%. The Chinese economy showed considerable
resilience.
Specifically, in the first half of 2018, China’s economic performance was mani-
fested in the following aspects.

1.1 GDP Growth Declined Slightly, and Consumption Was

Still the Main Driver

In the first half of 2018, China’s GDP reached 41.96 billion yuan, a real increase
of 6.8% and 6.7% YoY in the first and second quarter, respectively, showing a
slight decline. For the twelve consecutive quarters, China’s real GDP growth rates

1 Typically, the growth of the total retail sales of social consumer goods has continued to fall, while
the contribution of final consumption expenditure to GDP growth has increased rapidly since 2015.
The main reason is that, though both of them are taken as measurement of consumption, they have
different specifications. Compared with the final consumption expenditure, the total retail sales
of social consumer goods include consumption by social groups, but do not include residents’
service consumption and government service consumption. Due to the slowdown of the growth
of the total retail sales of consumer goods by social groups and accelerating growth of residential
service consumption and government service consumption, there has been a divergence between
the growth rate of the total retail sales of social consumer goods and the contribution of final
consumption expenditure to GDP growth (Huang and Dong 2008).

© Springer Nature Singapore Pte Ltd. 2019 1

Centre for Macroeconomic Research, China’s Macroeconomic Outlook,
Current Chinese Economic Report Series,
https://doi.org/10.1007/978-981-13-6077-0_1
2 1 China’s Economic Performance in the First Half of 2018

100.0
77.4 79.4 77.8 78.5
80.0
64.1 66.2 63.6 66.5 64.3 64.0
62.2 59.7
58.2 58.8
60.0
42.5 41.6 43.5 44.0 43.1
36.9 34.6 34.7
40.0 33.0 32.1 31.3 31.4
19.2 19.2
16.7
20.0 9.1
4.8
-0.7 -1.3 1.4 1.1 1.3
0.0 -9.7 -7.6 -9.6 -9.1 -9.9
-14.3

-20.0
2015Q1

2015Q2

2015Q3

2015Q4

2016Q1

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

2018Q1

2018Q2
Final consumption expenditure Gross capital formation Net exports

Fig. 1.1 Shares of the three components of GDP by expenditure approach to GDP growth: cumu-
lative, YoY, %. Source CQMM team calculations on CEIC data

maintained a range of 6.7–6.9%. By expenditure approach, shares of final consump-

tion expenditure, gross capital formation, and net exports, to GDP growth were 78.5,
31.4 and −9.9%, respectively, changes in 19.7, −0.7 and −19.0 percentage points
respectively compared with those in the previous year (see Fig. 1.1). And their con-
tributions to GDP growth were 5.3, 2.1 and −0.7 percentage points, respectively.
Expenditure on consumption has become the main driver for China’s economic
growth. The small fluctuations in the contribution of investment to GDP growth
were mainly attributed to the high growth of real estate investment, which offset the
sharp decline in the growth of infrastructure investment (see Fig. 1.2). Of the three
industries, contribution of primary, secondary and tertiary industries to GDP stayed
basically stable at around 6:40:54 (see Fig. 1.3).

1.2 Consumption Growth Slowed Down, and Motor

Vehicles Consumption Became the Main Factor

In the first half of 2018, the total retail sales of social consumer goods reached
18.08 trillion yuan, a nominal increase of 9.4% YoY, and a real increase of 7.7%,
down 1.0 and 1.6 percentage points from the same period of the previous year (see
Fig. 1.4). Of the total retail sales of consumer goods above designated size, the six
largest categories are: motor vehicles; petroleum and related products; food, bever-
age, tobacco, and liquor; textiles, wearing apparel and household articles; household
electric appliances and electronic products; medicines and medical appliances. The
decline in consumption growth is mainly related to the rapid decline in the growth
1.2 Consumption Growth Slowed Down, and Motor Vehicles … 3

25.0 7.1
7.0
20.0 7.0
6.9
15.0 6.9
6.8
10.0 6.8
6.7
5.0 6.7
6.6
0.0 6.6
03-2015

06-2015

09-2015

12-2015

03-2016

06-2016

09-2016

12-2016

03-2017

06-2017

09-2017

12-2017

03-2018

06-2018
Manufacturing Real estate Infrastructure GDP(RHS)

Fig. 1.2 Growth rates of GDP and three major sectors: cumulative, YoY, %. Source CQMM team
calculations on CEIC data

100.0
90.0
80.0
52.4 51.3 50.2 54.0 52.8 51.6 54.0 52.8 51.6 54.3
70.0 54.6 56.5 56.3 56.6

60.0
50.0
40.0
30.0 41.0 40.9 39.6 39.9 40.5
40.2 41.3 39.5 40.2 40.2 40.4
38.0 38.9 39.0
20.0
10.0
6.3 7.7 8.8 5.5 6.5 7.6 8.6 5.8 7.0 7.9 5.3
0.0 5.1 4.8 4.5
03-2015

06-2015

09-2015

12-2015

03-2016

06-2016

09-2016

12-2016

03-2017

06-2017

09-2017

12-2017

03-2018

06-2018

Primary industry Secondary industry Tertiary industry

Fig. 1.3 Contribution of the three industries to GDP growth: cumulative, %. Source CQMM team
calculations on CEIC data
4 1 China’s Economic Performance in the First Half of 2018

16.00

15.00

14.00

13.00

12.00

11.00

10.00

9.00

8.00
02-2012
05-2012
08-2012
11-2012
02-2013
05-2013
08-2013
11-2013
02-2014
05-2014
08-2014
11-2014
02-2015
05-2015
08-2015
11-2015
02-2016
05-2016
08-2016
11-2016
02-2017
05-2017
08-2017
11-2017
02-2018
05-2018
Total Urban area Rural area

Fig. 1.4 Growth rates of total retail sales of social consumer goods: cumulative, YoY, %. Source
CQMM team calculations on CEIC data

of motor vehicles consumption. In the first half of 2018, motor vehicles consump-
tion decreased by 7% YoY, down 16.8 percentage points from the same period of
the previous year (see Fig. 1.5). Subjected to changes in tariffs on July 1, the sales
of motor vehicles in May and June dropped significantly. As motor vehicles con-
sumption accounts for 28 and 13% of the total retail sales of enterprises above the
designated size and the total retail sales of consumer goods, respectively, the decline
in motor vehicles consumption lowered the growth of total consumption.
In the first half of 2018, the total retail sales of urban consumer goods reached
15.41 trillion yuan, a nominal increase of 9.2% YoY, down 0.9 percentage points from
the same period of the previous year. The total retail sales of rural consumer goods
reached 2.59 trillion yuan, a nominal increase of 10.5% YoY, down 1.8 percentage
points from the same period of the previous year (see Fig. 1.4).
Consumption depends mainly on income. In the first half of 2018, the real dispos-
able income of urban residents increased by 5.8% YoY, which was 1.0 percentage
point lower than GDP growth rate, 0.7 percentage points lower than the same period
of the previous year. The real disposable income of rural residents went up by 6.8%
YoY, which was equal to GDP growth rate, down 0.6 percentage points from the
same period last year. The national per capita real disposable income picked up by
6.6% YoY, 0.2 percentage points lower than the GDP growth rate by 0.2 percentage
points, indicating that China’s current income distribution is not conducive to the
increase of residents’ income (see Fig. 1.6).
1.2 Consumption Growth Slowed Down, and Motor Vehicles … 5

20.00

15.00

10.00 9.80
8.10 7.90 7.90
6.90
5.00 4.20 3.50 3.50
2.20
0.00
-1.00

-5.00
-7.00
-10.00
06-2017

07-2017

08-2017

09-2017

10-2017

11-2017

12-2017

01-2018

02-2018

03-2018

04-2018

05-2018

06-2018
Automobiles Petroleum and related products
Food, beverages, tobacco and liquor Clothings, shoes, hats, and textiles
Household appliances and video appliance Traditional Chinese and Western medicines

Fig. 1.5 Growth rates of total retail sales of enterprises above designated size by category of main
commodities: cumulative, YoY, %. Source CQMM team calculations on CEIC data

11.00

10.00

9.00

8.00

7.00

6.00

5.00

4.00
03-2014
05-2014
07-2014
09-2014
11-2014
01-2015
03-2015
05-2015
07-2015
09-2015
11-2015
01-2016
03-2016
05-2016
07-2016
09-2016
11-2016
01-2017
03-2017
05-2017
07-2017
09-2017
11-2017
01-2018
03-2018
05-2018

National Urban residents Rural residents

Fig. 1.6 Growth rates of residents’ per capita real disposable income: cumulative, YoY, %. Source
CQMM team calculations on CEIC data
6 1 China’s Economic Performance in the First Half of 2018

1.3 The Growth of Investment in Manufacturing Edged up,

While the Growth of Infrastructure Investment
Declined Significantly and that of Investment in Real
Estate Development Maintained Stable

In the first half of 2018, the total FAI of the whole society (excluding rural household)
went up by 29.73 trillion yuan, a nominal increase of 6.0% YoY, down 2.6 percentage
points from the same period of the previous year. The private FAI increased by 8.4%
YoY, 1.2 percentage points higher than the same period of the previous year. The
difference between the growth rate of total FAI and that of private FAI has been
gradually narrowed from 5.4 percentage points in October 2016 to −0.2 percentage
points in January 2018. Since February 2018, the growth rate of total FAI has been
lower than that of private FAI. And the gap between them expanded from −0.2
percentage points in February to −2.4 percentage points in June (see Fig. 1.7).
That the growth rate of private FAI in the first half of 2018 is higher than that
of total FAI in the whole society is mainly due to the significant decline in the
growth rate of investment by state-owned and state-holding enterprises and the sharp
decline in the growth rate of infrastructure investment in the tertiary industry (see
Fig. 1.8). The change in the growth gap of between the total and private investment
in the tertiary industry shows that the problem of institutional entry barriers faced
by private investment has relatively eased. Nonetheless, the growth rate of private
investment in the secondary industry was still at a low level in the past decade.

12.00

10.00

8.00

6.00

4.00

2.00

0.00
01-2016
02-2016
03-2016
04-2016
05-2016
06-2016
07-2016
08-2016
09-2016
10-2016
11-2016
12-2016
01-2017
02-2017
03-2017
04-2017
05-2017
06-2017
07-2017
08-2017
09-2017
10-2017
11-2017
12-2017
01-2018
02-2018
03-2018
04-2018
05-2018
06-2018

Private investment in FAI Total investment in FAI

Fig. 1.7 Growth rates of total and private FAI: cumulative, YoY, %. Source CQMM team calcula-
tions on CEIC data
1.3 The Growth of Investment in Manufacturing Edged up, While … 7

40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
01-2016
02-2016
03-2016
04-2016
05-2016
06-2016
07-2016
08-2016
09-2016
10-2016
11-2016
12-2016
01-2017
02-2017
03-2017
04-2017
05-2017
06-2017
07-2017
08-2017
09-2017
10-2017
11-2017
12-2017
01-2018
02-2018
03-2018
04-2018
05-2018
Primary industry: total FAI Secondary industry: total FAI
Tertiary: total FAI Primary industry: private FAI
Secondary industry: private FAI Tertiary industry: private FAI

Fig. 1.8 Growth rates of total and private FAI by industries: cumulative, YoY, %. Source CQMM
team calculations on CEIC data

In the first half of 2018, manufacturing investment increased by 6.8% YoY, 1.3
percentage points higher than the same period of the previous year. Manufacturing
accounted for 31.2% of the total FAI of the whole society. In recent years, although
manufacturing investment still plays an important role in the total FAI of the whole
society, its proportion continued to fall. As the proportion of private investment in
manufacturing investment was 87.1%, the growth of private investment in manu-
facturing directly determines the direction of the total investment in manufacturing.
Since the third quarter of 2016, due to the global economic recovery, the growth
of private investment in manufacturing has reversed the previous downward trend
and gradually stabilized. However, in the second half of the year, the impact of
Sino-US trade disputes is expected to pull down the growth of private investment in
manufacturing (see Fig. 1.9).
In the first half of 2018, investment in infrastructure construction went up by
7.3% YoY, down 13.8 percentage points from the same period of the previous year.
Such a sharp drop was because that, on the one hand, since 2017, holding against
systemic risks has been taken as the focus of economic work of China’s central gov-
ernment. Regulating financing and debt-raising of local governments and cleaning
up non-compliant and illegal projects has the restricted local government’s financing
channels. Not only the lack of funding sources, but also the suspension and mitiga-
tion of some major projects, have slowed the growth of infrastructure investment. On
the other hand, from the perspective of demand for infrastructure investment, after
years of rapid development in infrastructure construction, the need to substantially
increase infrastructure investment has relatively diminished.
8 1 China’s Economic Performance in the First Half of 2018

12.00

10.00

8.00

6.00

4.00

2.00

0.00
06-2015

08-2015

10-2015

12-2015

02-2016

04-2016

06-2016

08-2016

10-2016

12-2016

02-2017

04-2017

06-2017

08-2017

10-2017

12-2017

02-2018

04-2018

06-2018
Total investment Private investment

Fig. 1.9 Growth rates of total and private investment in manufacturing: cumulative, YoY, %. Source
CQMM team calculations on CEIC data

In the first half of 2018, the total investment in real estate development picked
up by 7.4% YoY, an increase of 1.9 percentage points over the same period of the
previous year, showing a good momentum. As to the several sub-indicators of real
estate, from January to June, the growth rate of new construction area of commercial
housing increased from 2.95 to 11.78%, and the land acquisition area went up from
−1.23 to 7.2%, reflecting that real estate investment still maintained relatively high
growth. However, affected by strict regulation and control policy on real estate,
the growth rate of the sales area of commercial housing fell slightly from 4.11 to
3.32% (see Fig. 1.10). Under strict financial supervision, the growth rate of domestic
loan for investment in real estate development dropped sharply to −7.9%, down 30
percentage points from the same period of the previous year. In terms of sources
of funds, investment in real estate development only increased by 4.6%, down 6.6
percentage points over the same period last year. Meanwhile, the growth of the source
of real estate development funds continued to decline, and the pressure on real estate
enterprises increased, indicating that the good momentum of real estate investment
began to weaken (see Fig. 1.11).
1.3 The Growth of Investment in Manufacturing Edged up, While … 9

50
40
30
20
10
0
-10
-20
-30
-40
01-2015
03-2015
05-2015
07-2015
09-2015
11-2015
01-2016
03-2016
05-2016
07-2016
09-2016
11-2016
01-2017
03-2017
05-2017
07-2017
09-2017
11-2017
01-2018
03-2018
05-2018
New construction area of commercial housing Commercial housing sales area
Land purchase area

Fig. 1.10 Changes in sub-indicators of real estate: cumulative, YoY, %. Source CQMM team cal-
culations on CEIC data

20

15

10

-5
01-2015
03-2015
05-2015
07-2015
09-2015
11-2015
01-2016
03-2016
05-2016
07-2016
09-2016
11-2016
01-2017
03-2017
05-2017
07-2017
09-2017
11-2017
01-2018
03-2018
05-2018

Investment in real estate development Sources of real estate development funds

Fig. 1.11 Investment in real estate development and sources of real estate development funds:
cumulative, YoY, %. Source CQMM team calculations on CEIC data
Another random document with
no related content on Scribd:
[296]

Schimkewitsch, Zeitschr. f. wiss. Zool. lix. 1895, p. 46.

[297]

Hatschek, Arb. Zool. Inst. Wien, iii. 1881, p. 79.

[298]

Fraipont, "Le Genre Polygordius," Fauna u. Flora des Golfes v.

Neapel, Monogr. xiv. 1887.

[299]

T. J. Parker, Lessons in Elementary Biology, London, 1891, p. 267,

gives a full account of the anatomy and development of
Polygordius.

[300]

"Die Capitelliden," Fauna u. Flora d. Golfes v. Neapel, Monogr. xvi.

1887, p. 350.

[301]

Encyclopaedia Britannica, 9th ed., Art. "Mollusca," p. 652.

[302]

Benham, "The Post-Larval Stage of Arenicola," J. Mar. Biol. Assoc.

iii. (n.s.) 1893, p. 48.

[303]

The blood is colourless in Syllidae and Nephthydidae.

[304]

Ehlers states that some Eunicidae have green blood.

[305]

Benham, Quart. J. Micr. Sci. xxxix. 1896, p. 1.

[306]

Schaeppi, Jena. Zeit. xxviii. 1894, p. 217.

[307]

Goodrich, Quart. J. Micr. Sci. xxxiv. 1893, p. 387.

[308]

Benham, Quart. J. Micr. Sci. xxxii. 1891, p. 325. See also Bourne
(nephridium of Polynoë), Tr. Linn. Soc. (Zool.), ii. 1883, p. 357;
Meyer, for nephridium of Terebellidae, Sabellidae, and Cirratulidae,
in Mt. Zool. Stat. Neapel, vii. 1887, p. 592.

[309]

It is worthy of note that in Aeolosoma alone amongst the

Oligochaeta does the brain lie in the prostomium in the adult.

[310]

Andrews, "The Eyes of Polychaetes," J. Morph. vii. 1892, p. 169.

[311]

Wistinghausen, "Entwick. v. N. dumerilii," Mt. Zool. Stat. Neapel, x.

1891, p. 41.

[312]

This is a modification of the classification proposed by me at the

meeting of the British Association at Oxford, 1894 (see Report, p.
696). For further characteristics of these Orders and sub-Orders
see below Chap. XII. Ehlers, "Die Borstenwürmer," 1864, gives a
historical survey of the group, and enumerates the earlier
classifications.

[313]

In Coabangia (see p. 284) the anus is near the anterior end, on the
ventral surface.
[314]

It is doubtful whether these organs are palps or only lateral lips.

[315]

Pruvot traced the nerve supply to these organs, and thus

established their homology. Arch. d. Zool. Expér. (ser. 2) iii. 1885,
p. 211.

[316]

Meyer, "Stud. ub. d. Körperbau der Anneliden," Mt. Zool. Stat.

Neapel, vii. 1887, p. 592; viii. 1888, p. 462. In this work a great
number of important and interesting anatomical facts are recorded
with respect to the Terebelliformia and Sabelliformia, as well as
certain details as to the structure and development of the
nephridia.

[317]

In some of the members of this family paired lateral tentacles

appear to exist.

[318]

It is possible that some of these may be peristomial.

[319]

Individual cases in which chaetae are present have been

recorded.

[320]

Meyer, loc. cit.

[321]

Haswell, P. Linn. Soc. N.S. Wales, vii. 1883, p. 251.

[322]
Eisig, "Die Capitelliden," Fauna u. Flora G. v. Neapel, Monogr. xvi.
1887, p. 331.

[323]

Compare with this the muscular organ of Dinophilus, p. 243,

Protodrilus, and a similar structure which occurs in Terebellids.

[324]

Korschelt, "Über Ophryotrocha puerilis," Zeitschr. f. wiss. Zool. lv.

1893, p. 224.

[325]

Eisig, Mt. Zool. Stat. Neapel, ii. 1881, p. 255.

[326]

They are specially large also in the Typhloscolecidae; while

Racovitza (Ann. Mag. N. H. (ser. 6), xv. 1895, p. 279) has recently
suggested that the caruncle of Amphinomidae belongs to the
category of nuchal organs, and compares it with the ciliated
lappets of Pterosyllis.

[327]

Ehlers, Zeitschr. f. wiss. Zool. liii. 1892, p. 217.

[328]

See Claparède and Metschnikoff, "Beit. zur Kennt. d. Entwick der

Chaetopoden," Zeitschr. f. wiss. Zool. xix. 1869, p. 163; and
Fewkes, "On the Development of certain Worm Larvae," Bulletin
Mus. Harvard, xi. 1883, p. 167.

[329]

For an account of the anatomy and development of a

Trochosphere, see Hatschek, on Eupomatus, in Arbeit. Zool. Inst.
Wien, vi. 1885. Also Meyer, Mt. Zool. Stat. Neapel, viii. 1888, p.
462; and for Polynoid larva see Häcker, Zool. Jahrb. Abth. Anat.
viii. 1895, p. 245.

[330]

See Meyer (ref. on p. 261).

[331]

Many of the Polynoids are sexually dimorphic.

[332]

Claparède, "Annélides Chétopodes du Golfe de Naples,"

Supplement, 1870; and Wistinghausen, Mt. Zool. Stat. Neapel, x.
1891, p. 41.

[333]

Claparède used the term "epigamous" for this phase; Ehlers

employed the term "epitokous," whilst he called the "Nereid" phase
"atokous," under the impression that the worm did not become
mature in this condition.

[334]

Malaquin gives a detailed account of the asexual reproduction in

Syllidae in Recherches sur les Syllidiens, Lille, 1893, and in Revue
Biol. d. Nord de la France, iii. 1891. See also St. Joseph, "Les
annelides polychétes des côtes de Dinard," Ann. Sci. Nat. Zool.
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Alex. Agassiz, Boston J. Nat. Hist. vii. 1863, p. 384.

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Huxley, Edinb. New Philosoph. Journ. 1855, i. p. 113.

[337]
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[338]

Two new heads have been observed in Typosyllis variegata by

Langerhans, and two new tails in another Syllis.

[339]

Dalyell, The Powers of the Creator revealed, etc., vol. ii. 1853, p.
225 et seq.

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von Kennel, Arb. Zool. Instit. Würzburg, vi. 1883, p. 259.

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Giard, C. R. Soc. Biol. v. 1893, p. 473.

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See M‘Intosh, Ann. Mag. Nat. Hist. (ser. 4) ii. 1868, p. 276.

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Lankester has suggested that a strong acid is secreted for the

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M‘Intosh, Ann. Mag. Nat. Hist. (ser. 6) xiii. 1894, p. 1.

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Dalyell, The Powers of the Creator revealed, ii. 1853, p. 217.

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[348]

Schmiedeberg, Mt. Zool. Stat. Neapel, iii. 1882, p. 373.

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For pelagic forms, see Camille Viguier, Arch. de Zool. Expér. (ser.
2) iv. 1886, p. 347; also Reibisch, Die pelag. Phyllodociden u.
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[350]

Lankester, Journ. Anat. and Physiol. 1868, p. 114; and 1870, p.

119; see also MacMunn, "On the Chromatology of the Blood in
some Invertebrates," Quart. J. Micr. Sci. xxv. 1885, p. 469.

[351]

For coloured pictures of worms consult Schmarda, "Neue

wirbellose Thiere," 2nd part, 1861; Milne Edwards in Cuvier's
"Règne Animal" (Ed. Disciples de Cuvier).

[352]

Semper, Animal Life, "Internat. Sci. Series," 1881, p. 401.

[353]

The experiments were made by Mr. Garstang at the Laboratory of

the Marine Biological Association, and are recorded by Poulton in
The Colours of Animals, "Internat. Sci. Series," 1890, p. 201.

[354]

Panceri, Atti Acad. Sci. Napoli, vii. 1875.

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M‘Intosh, H.M.S. "Challenger" Reports, "Polychaeta," vol. xii. p. ix.

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For an account of these worms see M‘Intosh, loc. cit. p. 257.

[357]

For a list of parasitic Polychaetes see St. Joseph, Ann. Sci. Nat.
(ser. 7) v. 1888, p. 141.

[358]

Semper, loc. cit. p. 340.

[359]

See "Challenger Reports," and St. Joseph, loc. cit.

[360]

"Challenger" Reports, loc. cit. p. xxx.

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See Hornell, Fauna of Liverpool Bay, Report III. 1892, p. 126.

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Zittel, Handbuch d. Palaeontologic (Palaeozoologie), i. 1876-80, p.

562.

[363]

Ehlers, Zeitschr. f. wiss. Zool. xviii. 1868, p. 241.

[364]

The Chaetopteridae may have to be placed elsewhere in the

system, as they are peculiarly modified, and present features
recalling the Cryptocephala, from which it is possible they have
descended.

[365]
Meyer (Mt. Zool. Stat. Neapel, vii. 1887, p. 669, note) suggests
that the tentacular filaments of Cirratulids are really prostomial, but
have shifted back on to the peristomium, or even farther.

[366]

It is probable that the genital ducts of Sternaspis and

Chlorhaemids are modified nephridia.

[367]

The character of head and parapodium in each family will be

gathered from the figures accompanying the general description in
Chap. X., so that detailed description is unnecessary. In all cases
the chaetae form valuable specific characters.

The examples of the various families are British, unless the

opposite is expressly stated; but most of them are not confined to
our shores, and the foreign localities are usually given. No attempt
is made to enumerate all the British species.

The following books may be found useful for identifying the

worms:—

Claparède, Recherches anat. sur les Annélides observées dans les

Hebrides, 1861; Annélides Chétopodes du golfe de Naples, 1868, and
Suppl., 1870.
Cunningham and Ramage, "Polychaeta Sedentaria of the Firth of Forth,"
Trans. Roy. Soc. Edinburgh, xxxiii. 1888, p. 635.
Ehlers, Die Borstenwürmer, 1868.
Johnston, "British Museum Catalogue of Non-Parasitical Worms," 1865.
M‘Intosh, "British Annelida," Trans. Zool. Soc. ix. 1877, p. 371; "Invert.
Marine Fauna of St. Andrews; Annelida," Ann. Mag. Nat. Hist. (4) xiv. 1874,
p. 144.
Malmgren, "Nordiska Hafs-Annulater," Öfversigt af K. Vet.-Akad.
Förhandlingar, 1865, pp. 51, 181, 355; and "Annulata Polychaeta," ibid.
1867, p. 127.
 St. Joseph, "Les Annélides Polychétes des côtes de Dinard," Ann. Sci. Nat.
(Zool.) (7) vol. i. 1886, p. 127; v. 1888, p. 141; xvii. 1894, p. 1; xx. 1895, p.
185.

[368]

Malaquin, Recherches sur les Syllidiens, 1893; for structure of the

gizzard, see also Haswell, Quart. J. Micr. Sci. xxvi. 1886, p. 471;
and xxx. 1889, p. 31.

[369]

See M‘Intosh's Memoirs, loc. cit.

[370]

Herein are included the various genera formed by Kinberg,

Malmgren, and others.

[371]

It appears to be the same as P. grubiana Clap.

[372]

Marenzeller has shown that Johnston's P. scolopendrina is not

identical with that of Savigny, and suggests the above name for it.

[373]

F. Buchanan, "Report on Polychaetes, Part I." Sci. Proc. Roy.

Dublin Soc. vii. (n.s.) 1893, p. 169.

[374]

Polyodontes Ran. deserves mention as being a large, rare form

with peculiar pedal gland; cf. Eisig (ref. on p. 268), p. 324; and
Buchanan, Quart. J. Micr. Sc. xxxv. 1894, p. 433.

[375]

Many authorities regard this species as synonymous with

Savigny's P. laminosa.
[376]

According to a verbal communication from Mr. J. Hornell of Jersey,

they belong to P. maculata Müll., while Mr. Garstang believes them
to belong to Eulalia viridis.

[377]

These segmentally-arranged brown spots may perhaps be

photogenic.

[378]

Greef, Acta Ac. German., xxxix. 1877.

[379]

Greef, Zeitschr. f. wiss. Zool. xlii. 1885, p. 432.

[380]

Buchanan, Quart. J. Micr. Sci. xxxv. 1894, p. 445.

[381]

Buchanan, Sci. Proc. R. Dublin Soc. viii. (n.s.) 1893, p. 169.

[382]

Reibisch, Phyllodociden u. Typhloscoleciden d. Plankton Exped.

1895.

[383]

The British species is usually referred to as C. insignis Baird, but

Joyeux Laffuie (Arch. Zool. Exp. (ser. 2) viii. 1890, p. 244) has
shown that there is only one European species. It is possible that
there is a closer affinity with the Sabelliformia than is at present
supposed.

[384]

Compare Sternaspis, p. 336.

[385]

For literature, see Benham, Quart. J. Micr. Sci. xxxix. part 1, 1896,
p. 1.

[386]

F. Buchanan, Quart. J. Micr. Sci. xxxi. 1890, p. 175.

[387]

In some genera there are no gills, e.g. Leaena.

[388]

These characters are not necessarily generic.

[389]

Eisig, "Die Capitelliden," Fauna u. Flora G. v. Neapel, Monogr. xvi.

1887.

[390]

Ed. Meyer., Arch. mikr. Anat. xxi. 1882, p. 769.

[391]

Vejdovsky, Denk. Akad. Wien, xliii. 1882, part 2, p. 33; and

Rietsch, Ann. Sci. Nat. (Zool.) ser. 6, xiii. 1882, art. 5.

[392]

For anatomy see Meyer, Mt. Zool. Stat. Neapel, vii. 1887.

[393]

Andrews, Journ. Morph. v. 1891, p. 271.

[394]

A. G. Bourne, Quart. J. Micr. Sci. xxiii. 1883, p. 168.

[395]
Closely allied is Manayunkia Leidy, which occurs in fresh-water
lakes of America. Another fresh-water genus is Coabangia Giard,
which perhaps deserves the creation of a special family. The anus
is ventral and anterior. The chaetae are peculiarly arranged, dorsal
uncini being present only on four segments. The first body
segment carries a ventral bundle of five great "palmate" chaetae.

[396]

For the anatomy see Meyer, Mt. Stat. Neapel, vii. 1887; see also
above, p. 306.

[397]

von Graff, "Myzostomida," "Challenger" Reports, part 27, vol. x.

1884; and "Supplement," part 61, vol. xx. 1887.

[398]

Marenzeller, Anz. Akad. Wien, xxxii. p. 192.

[399]

Mt. Zool. Stat. Neapel, xii. 1896, p. 227; where, too, see literature.

[400]

Beard, Mt. Zool. St. Neap. v. 1884, p. 544.

[401]

Quart. J. Micr. Sci. (n.s.) vol. iv. 1864, p. 258; and v. pp. 7, 99.

[402]

Zeitschr. wiss. Zool. xix. 1869, p. 563.

[403]

De Lumbrici terrestris Historia naturali, Brussels, 1829.

[404]
Naturg. ein. Wurm-Arten d. süssen u. salzigen Wasser,
Copenhagen, 1771.

[405]

Trans. Roy. Soc. Victoria, vol. i. 1888, p. 1.

[406]

Phil. Trans. clxxxvi. 1895, A, p. 383.

[407]

Mém. cour. Ac. Belg. lii. 1890-93.

[408]

Quart. J. Micr. Sci. xxxi. 1890, p. 83.

[409]

Beddard, Ibid. xxxiii. 1892, p. 325.

[410]

Beddard, Ann. Mag. Nat. Hist. (6) xiii. 1894, p. 205.

[411]

Mém. Soc. Zool. France, iii. 1890, p. 223.

[412]

Vegetable Mould and Earthworms, London, 1881.

[413]

Zool. Anz. xi. 1888, p. 72.

[414]

See Fletcher, P. Linn. Soc. N.S.W. (2) iii. 1889, p. 1542.

[415]

In Sitzungs-Ber. Böhm. Ges. 1889, p. 183.

[416]

See Dr. Rosa in Ann. Hofmus. Wien, vi. 1891, p. 379.

[417]

Entwickelungsgeschichtliche Untersuchungen, Prag, Heft i. 1888,

p. 33.

[418]

See Kleinenberg, Quart. J. Micr. Sci. xix., 1879, p. 206.

[419]

Both Col. Feilden and Mr. Trevor-Battye found specimens in

Kolguiev.

[420]

Neue wirbellose Thiere, Leipzig, ii. 1861, p. 11.

[421]

Kew Bull. Misc. Information, No. 46, 1890.

[422]

Rev. Biol. Nord France, i. 1889, p. 197.

[423]

SB. Ges. naturf. Berlin, 1893, p. 19.

[424]

System u. Morph. d. Oligochaeten, Prag, 1884.

[425]
See my text-book of Zoogeography (Cambridge, 1895) for fuller
treatment.

[426]

Ann. Mag. Nat. Hist. (6) ix. 1892, p. 12.

[427]

Darwin, Vegetable Mould and Earthworms, p. 121.

[428]

"An Attempt to classify Earthworms," Quart. J. Micr. Sci. xxxi.

1890, p. 201.

[429]

Oxford, 1895.

[430]

See especially Vejdovsky, Syst. u. Morph. Olig. Prag, 1884.

[431]

Vejdovsky, Monographie der Enchytraeiden, Prag, 1879.

Michaelsen, "Synopsis der Enchytraiden," Abh. Ver. Hamburg, xi.
1889, p. 1.

[432]

J. P. Moore, "The Anatomy of Bdellodrilus," J. Morphol. x. 1895, p.

497.

[433]

Beddard, Trans. Roy. Soc. Edin. xxxv. 1890, p. 629, and xxxvi.
1892, p. 1.

[434]
A. G. Bourne, "On the Naidiform Oligochaeta," Quart. J. Micr. Sci.
xxxii. 1891, p. 335.

[435]

F. E. Beddard, Trans. Roy. Soc. Edin. xxxvi. 1892, p. 273.

[436]

Vejdovsky, System u. Morph. d. Oligochaeten, Prag, 1884.

[437]

"Anatomical Notes on Sutroa," Zoe. ii. 1892, p. 321.

[438]

"Pacific Coast Oligochaeta," Mem. California Acad. Sci. vol. ii.

[439]

Quart. J. Micr. Sci. xxxvi. 1894, p. 307.

[440]

See Spencer, Proc. Roy. Soc. Vict. v. 1893, and Fletcher, P. Linn.
Soc. N.S.W. 1886-1888, for Australian forms; Rosa, Ann. Mus. civ.
Genova, vi. 1886, x. 1890, and xii. 1892, for Oriental species, etc.

[441]

See Fletcher and Spencer, already quoted, for Australian species.

[442]

Eisen, "Anat. Studies on Ocnerodrilus," Proc. Calif. Acad. (2) iii.

1892, p. 228.

[443]

Beddard, Ann. Mag. Nat. Hist. (6) x. 1892, p. 74.

[444]
Beddard, P. Z. S. 1885 and 1895, for Antarctic Acanthodrilids;
Michaelsen, in Jahrb. Hamburg. Anst. 1888-95, for Benhamia.

[445]

For a general account of the Eudrilidae, see my Monograph of the

Order Oligochaeta, Oxford, 1895.

[446]

Nouv. Arch. Mus. Paris, viii. 1872, p. 5.

[447]

The scattered literature of this family is due to Benham,

Michaelsen, Perrier, Rosa, and others.

[448]

Rosa, "Revisione dei Lumbricidae," Mem. Acc. Torino (2), xliii.

1893, p. 399; also the Rev. H. Friend's numerous and useful
papers, and especially "A New Species of Earthworms," Proc. Roy.
Irish Ac. (3) ii. 1891-93, p. 402; and "The Earthworms of Ireland,"
Irish Nat. v. 1896, p. 69, etc.

[449]

In the tables the figures refer to the segments of the body.

Opposite the name of each species are two sets of lines; the upper
series indicate the segments occupied by the clitellum; the lower
series those occupied by the tubercula pubertatis. The dots
indicate the occasional extension of the clitellum or of the
tubercula.

[450]

"Annelés," vol. iii. 1889-90, p. 477, in the Suites à Buffon.

[451]

See v. Kennel, Zool. Jahrb. ii. 1887, p. 37.

[452]

Nouvelle Monographie des Sangsues médicinales. Paris, 1857.

[453]

Quart. J. Micr. Sci. xxvi. 1886, p. 317.

[454]

See Grube, "Annulaten" of Middendorff's Sibirische Reise,

Zoology, 1851, p. 20; and Kowalevsky, Bull. Ac. St. Petersb. v.
June 1896.

[455]

See ref. on p. 395.

[456]

Asajiro Oka, Zeitschr. wiss. Zool. lviii. 1894, p. 79.

[457]

See Bürger, quoted on p. 403.

[458]

Loc. cit.

[459]

Quart. J. Micr. Sci. xxiv. 1884, p. 419; see also ibid. xxxiv. 1893, p.
545, which is mainly a criticism of Bolsius' additions to the very
considerable literature upon the Leech nephridium.

[460]

"Spermatophores as a Means of Hypodermic Impregnation," J.

Morphol. iv. 1891, p. 361.

[461]
Zeitschr. wiss. Zool. lviii. 1894, p. 440; and Zool. Jahrb. Anat. iv.
1891, p. 697.

[462]

"Annelés," vol. iii. 1889-90, p. 493, in the Suites à Buffon.

[463]

Whitman quotes with regretful approval (Proc. Americ. Acad. xx.

1884-85, p. 76) Sir J. Dalyell's remark, "It does not appear that the
history of the leech has advanced in proportion to the number of
literati who have rendered it the subject of discussion," and adds
on his own account the following severe indictment of his
predecessors: "As a considerable share of the work done in this
direction is purely systematic, it is somewhat surprising that not a
single description of any Hirudo has been given with sufficient
accuracy and completeness for a close comparison of even its
more important external characters with those of other species."

[464]

"Hirudinées de l'Italie," etc., Boll. Mus. Zool. Torino, vol. ix. 1894,
No. 192. See also Apathy, "Süsswasser-Hirudineen," Zool. Jahrb.
Syst. iii. 1888, p. 725.

[465]

Zeitschr. f. die gesammt. Naturwiss. vi. 1872, p. 422.

[466]

But Pennant in his British Zoology has referred to a leech which is

even larger. Upon the huge Basking shark (Selache) the fishermen
sometimes observe a leech, which invariably drops off when the
fish is brought to the surface, "of a reddish colour and about 2 feet
in length"; this may be a Pontobdella.

[467]

Ann. Mag. Nat. Hist. (6) xii. 1893, p. 75.