After a devastating stock market collapse in China last week, many investors are wondering if the Chinese economy is about to catch a serious crash.
But according to a new report from The Hill, the market crash has not yet taken place and there’s no reason to believe it will soon.
Instead, experts are suggesting that a massive government bailout could be in the cards, and that the economy could be heading in the right direction.
According to The Hill’s report, a huge portion of the Chinese government’s stimulus package was actually approved during last week’s market crash.
The Wall Street Journal reported in December that China’s government approved nearly $5 trillion worth of stimulus measures over the past year.
In the latest report, analysts at the consultancy IHS Global Insight believe that China has already spent about $5.5 trillion of its $10 trillion stimulus package.
This is not a situation that the Chinese would like to see happen, but this isn’t a situation they can afford to avoid, analysts wrote in a note.
“The economic growth of China is slowing down,” the analysts wrote.
“We believe the Chinese public is likely to remain concerned about the health of their economy for some time to come.”
IHS Global said that China will be able to continue to use its stimulus package to boost its economy through an additional two years, adding that the government’s budget deficit will remain within a manageable range of 1.4% of GDP through 2020.
The country’s economy is expected to grow 7.6% in 2020, according to the country’s official Xinhua news agency.
However, analysts have also said that the economic recovery in China will take years to complete, and China’s economic growth rate is forecast to drop to 3.6%, according to The Economist.
While the economy has been slow to recover from the market meltdown, China’s economy has grown by 7.5% in the last two years and by 6.7% in 2016.