The measures were approved at a cabinet meeting chaired by Premier Wen Jiabao on Wednesday, state media said, and would increase spending on infrastructure and a range of other sectors amid slowing domestic growth.

"China has decided to adopt an active fiscal policy and moderately easy monetary policies to foster fast but steady economic growth by expanding domestic demand," said a statement posted on the Cabinet's website.

The spending package would total four trillion yuan (586 billion dollars) by the end of 2010, including monies already earmarked this year, it said.

The measures come amid slackening overseas demand for China's manufactured goods -- the mainstay of the Chinese economy -- and the statement said they were aimed at spurring domestic consumption to take up that slack.

"Although we face many difficulties, domestic spending power remains strong," the statement said.

The move is the latest in a series of recent steps by China to counter the global financial crisis.

Economic growth in the country eased to nine percent in the third quarter of this year, the lowest in around five years, partly due to slowing exports.

The central bank has already cut interest rates three times since September and taken other steps to loosen monetary policy.

Those measures marked an about-face from a policy of steadily raising interest rates to cool the economy amid growing inflation and fears of overheating.

The Cabinet, or State Council, also recently approved a plan to spend two trillion yuan on construction of new railways from now until 2020.

The new approach mirrors similar policy steps taken between 1998 and 2004 to cope with the effects of the 1997-98 Asian financial crisis.

Those measures included issuing large amounts of treasury bonds and ramping up public investment.

"The economic situation China is facing now is far more grave than in 1998. There could be more coordination with other central banks as China is more exposed to the external environment," Xing Ziqiang, a Beijing-based economist with China International Capital Corp Ltd, told AFP.

"In 1998, it was mainly Asian countries, including some competitors of China, that ran into trouble. But this time it's China's export market -- America and Europe."

The new spending will be directed at a broad range of areas including the construction of railroads, highways and airports, boosting the services sector and agriculture, and upgrading power grids, the state-run broadcaster CCTV said.

Money also would be poured into social welfare systems including education and public health, it said.

However, the reports gave no breakdown on how much would be spent in each area.

The Cabinet also announced on Sunday it would expand a reform of its value-added tax regime, which state-run Xinhua news agency said could cut the tax burden on businesses by 120 billion yuan (about 17.6 billion dollars).

Although China's 9 percent growth in the third quarter of this year would be the envy of most countries, it was down from a roaring 11.4 percent for the full-year 2007.

The slowdown is raising fears that millions of factory workers could be left jobless and could confound China's plans to spread economic development from the prosperous coastal manufacturing areas into poor interior regions.

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