China Unveils $586 Billion Stimulus Package

Asian stock markets rose sharply after China announced a $586 billion economic stimulus package aimed at countering the effects of the global slowdown on China's booming economy. One analyst described the massive package, which was bigger than expected, as a New Deal with Chinese characteristics.

China's economy is weakening faster than expected. Growth slid to 9 percent in the third quarter, the slowest pace in five years.

Andy Rothman, of the brokerage CLSA, says China's going further than the developed economies by spending more and spending faster on its package. He notes that the stimulus will equal 8 percent of China's gross domestic product next year, compared with U.S. and German packages that are about 1 percent of those countries' GDP.

China will spend money on low-cost housing, social welfare and rural infrastructure, aimed at stimulating domestic spending.

The move inspired investor confidence. Shanghai's composite index closed 7.4 percent higher; Japan's Nikkei index ended 5.8 percent higher; and Hong Kong's Hang Seng was up 3.4 percent.

But analysts warn that China's billions are unlikely to turn around the county's economic slowdown, though they might put a floor under it.