With a view to bolster domestic demand and help avert recession, China unveiled a 'massive' economic stimulus program worth over half a trillion dollars. The package, to be spent over two years, is valued at about 4 trillion yuan ($586 billion).

The announced sum represents about 16% of China's economic output last year, and is roughly equal to the total of all central and local government spending in 2006.

The decision announced by the State Council includes spending in housing, infrastructure, agriculture, health care and social welfare, and features a tax deduction for capital spending by companies.

Following Sunday's announcement, China will enter a meeting of the Group of 20 largest economies, with a plan that would dwarf stimulus measures by others in the group, which is convening in Washington to combat a global slowdown in growth.

Xinhua, China's state-run news agency said Sunday that the program will "will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand."

If the stimulus package can help alleviate a slowdown in China's housing and investment boom, that could help cushion decreases in Chinese purchases of raw materials and goods from the U. S. and other developed nations.

Among foreign businesses that rely on a healthy Chinese economy, suppliers of metals and machinery for infrastructure construction and companies that target Chinese consumers will be closely watching the effects of the stimulus program.