China approved a massive stimulus plan on Sunday worth nearly $600 billion through 2010 to boost domestic demand as part of a global push for measures to soften an expected recession in many countries.



In Brazil, finance ministers, senior officials and leading central bank governors representing 90 percent of the world's economy tried to find ways to shield their economies from the backlash of the credit crisis.



"For those countries which are able, the encouragement is to take measures of support," said French Economy Minister Christine Lagarde.



"The Chinese minister said they were determined to support internal demand," she told reporters, referring to talks in Brazil's business capital among countries in the G20 group of advanced and big emerging economies.



Chinese official news agency Xinhua said the plan approved by the Cabinet in Beijing targeted investments in infrastructure, social welfare and other key sectors as part of an "active" fiscal policy.



The Cabinet announced an explicit shift in monetary policy, which it now described as "moderately easy" and a long-awaited reform to the way value added tax is calculated, giving companies an effective tax cut.



The head of the World Bank and other senior officials attending the G20's annual meeting all cited China as an important player in the attempts to kick-start growth.



China's central bank governor, Zhou Xiaochuan, said on Saturday the Asian export powerhouse, one of the few remaining engines of global growth, wanted to maintain its economic expansion, which he forecast at between 8 percent and 9 percent in 2009.



Some economists have predicted growth in China rate could slow to less than 8 percent next year, down from double-digit levels in the past five years until this year.



Also on Sunday, Taiwan's central bank unexpectedly cut interest rates by 25 basis points, its fourth reduction in just over a month as fears of a global recession threatens the export-led economy.



The finance chiefs attending the G20 meetings in Sao Paulo are trying to come up with proposals for their leaders to take to an emergency summit on the financial crisis next weekend in Washington.



In Europe, the main stimulus for growth would come from lowering interest rates, France's Lagarde said, reiterating her previous comments that a European Central Bank rate cut is likely soon.



"As far as the Europeans are concerned we have our monetary effort which is in the process of being consolidated with successive rate cuts and the anticipated rate cut maybe in the next few weeks," she said.



Other ministers at the Sao Paulo meetings also said their discussions touched on the need to further loosen monetary policy in some countries, even after aggressive interest rate cuts by central banks worldwide in recent weeks.



Next Sunday's summit in Washington is likely to address calls from some large emerging economies, such as Brazil, for a greater say in the way global finance is managed, long the preserve of the world's developed economies.



International Monetary Fund chief Dominique Strauss-Kahn told reporters the Sao Paulo talks showed "the G20 is the right body to try to handle the world's problems."



Some countries, like France, the current EU president, have billed the Washington summit as a chance for far-reaching reforms of institutions such as the IMF.



Other issues under discussion include new regulations for financial markets to prevent a repeat of the credit crisis that erupted last year and has pushed many leading economies towards recession.

http://in.biz.yahoo.com/081109/137/6z0bp.html



When China awakes, it will shake the world.
- Napoleon Bonaparte

Once China becomes strong enough to stand alone, it might discard us. A little later it might even turn against us, if its perception of its interests requires it.
- Henry Kissinger

This equates to 60% of India's GDP. lol

China's infrastructure will be light years forward after all funds in this stimulas package are exhausted.

Keynesian fiscal policy is the way to go, it produces tangible results that have long-term multiplier effects on the real economy. Never much of a Milton Friedman fan.
To think this time around all that money will be coming from reserves without the government having to issue Fed bonds like what happened in 1997 with the highway expansion policy. That is what I call strategic thinking for a rainy day.

150 new railways are under construction in China now. The total investment on railways will pass 150 billion RMB or more than US$20 billion in the 4th quater alone.

Did you make a mistake? I read 200 trillion RMB through to 2010. Take the exchange rate as 1 US$ = 7 RMB, that is nearly 29 trillion US$. Maybe the medium made a mistake.

4 trillion RMB=580billion US$.

I wouldn't be shocked to learn that a lot of that money would go for export subsidies for Chinese manufacturers. If Western demand for manufactured goods is not growing you can still grow your exports by forcing market share. lol.

F.uck an eye for an eye. You take my eye, and I will kill you, and all those you care about. That is our policy.

Central govt to pay 25% of stimulus package.

China's central government will finance 25% of the US$586 billion stimulus package announced to boost the economy and offset a looming economic crisis, the South China Morning Post reported. The rest of the funds for the package will come from provincial authorities, corporate investors and bank loans, said a deputy director with the National Development and Reform Commission. Zhou Xiaoqiang said the majority of the package will go to infrastructure spending. The first wave of the stimulus package will run up to US$17.6 billion and will be designated for agriculture, water conservation projects, rural health and education and the rebuilding of areas affected by the Sichuan earthquake, Zhou said. He added that he hoped the initial investment would attract a further US$58.6 billion in investment from non-government sources.

from chinaeconomicreview.com

China should prepare US$100 billion for buying some technologies and brands from western companies.

This is going to be on top of the 730 billion stated earlier for infrastructure?

No, 5 trillion RMB was what economists suggested. 4 trillion was approved.

^^^. Well this will be good news for the Aussie resources sector. I imagine a lot of the funds will go into infrastructure development as per the article touting the other figure