China plans to boost economy

China started a huge stimulus plan on Sunday estimated to be worth nearly $600 billion. This could begin a round of big spending or interest rate cuts by leading economies to hold back a recession in many countries.

In Brazil, finance ministers and central bank governors said they would do "all necessary measures" to have the financial markets back to normal and counter the backlash of the credit crisis.

Many developed economies are now facing a tightening next year after borrowing from banks suddenly shrinks, and new powerhouses such as China have been included in the domino effect.

World leaders meet next weekend to discuss what measures they need to do in coming months, and how much more say newer economies will have over global finance.

Easy monetary policy for China

China's official Xinhua news agency reported the world's fourth-largest economy approved 4 trillion yuan in new government spending between now and 2010, centered on infrastructure and social projects.

The move was praised by the head of the International Monetary Fund, Dominique Strauss-Kahn, who said it would have a positive effect on the world economy.

China's cabinet also reported a change to a "moderately easy" monetary policy, planning more rate cuts.

"Easy' monetary policy could mean, quantitively speaking, more money supply and a looser market liquidity," the head of China's central bank, Zhou Xiaochuan, told reporters in Brazil. "It can also be reflected in prices, for example the bank lending interest rate could become lower."

China has cut rate cuts three times 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 mobilize enormous resources to stimulate the economy when they put their minds to it."