China approved a huge stimulus plan on Sunday worth nearly $600 billion through 2010, part of a new global push agreed to by leading economies for measures to offset an expected recession in many countries.
-- China approves nearly $600bn economic stimulus
-- Leading econo-mies pledge action to fight recession
In Brazil, finance ministers, senior officials and leading central bank governors representing 90 percent of the world's economy said they would find ways to shield their economies from the backlash of the credit crisis.
Many of the world's biggest economies are now facing a contraction next year after lending from banks suddenly dried up, prompting governments from Washington to Beijing to rush to cut interest rates or spend more.
China's official Xinhua news agency said the world's fourth-largest economy approved a 4 trillion yuan ($586 billion) government spending package between now and 2010, focused largely on infrastructure projects.
The State Council, or cabinet, also announced a shift to a "moderately easy" monetary policy, possibly foreshadowing further reductions in borrowing costs on top of three interest rate cuts made since mid-September.
"This is pretty major," said Arthur Kroeber, head of Dragonomics, a Beijing economic consultant. "It reflects the official view of how serious this problem is and shows that this is a government that can mobilise enormous resources to stimulate the economy when they put their minds to it."
By comparison, the United States sent out about $100 billion in tax rebate checks this summer, while Germany last week agreed to a 50 billion euro pump-priming plan.
China's central bank governor, Zhou Xiaochuan, said on Saturday the Asian export powerhouse, one of the few remaining engines of global growth, expected economic expansion of 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.
NEED FOR COORDINATED ACTION TO DEAL WITH CRISIS:
In Brazil, ministers and other finance officials said there was a need for further moves to boost growth by other countries, including possible spending splurges or more interest rate cuts.
"There is consensus that we need co-ordinated action to deal with the crisis," Brazilian Finance Minister Guido Mantega told reporters after an annual meeting of the G20 group of advanced and big emerging economies, which was dominated by the crisis.
"It requires global action and so there is a need for institutions that are suitable for this kind of common and co-ordinated action. This has not yet been resolved but the G20 is a strong candidate to be the co-ordinator."
Brazil and other emerging economies have demanded more of a voice in management of global finance that has long been the preserve of rich countries, which are members of the G7 group.
South African Finance Minister Trevor Manuel told reporters the G7 can no longer be "a little club on its own."
In a communique, the G20 saw the need for comprehensive reform of the Bretton Woods institutions, such as the International Monetary Fund and the World Bank, "so that they can more adequately reflect changing economic weights in the world economy and be more responsive to future challenges."
But G20 officials conceded their declaration was short on specifics and any concrete proposals for reforms were only likely to emerge two or three months after an emergency G20 leaders' summit scheduled for next weekend in Washington.
In Europe, the main stimulus for growth would come from interest rate cuts, French Finance Minister Christine Lagarde said, reiterating her previous comments that a new European Central Bank rate cut was possible "in the next few weeks."
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 world-wide in recent weeks.
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