"the Chinese stimulus package would be tantamount to a $1.1 trillion program here "

On China's stimulus, Yves Smith gives some figures:

"We have gotten so large to throwing large numbers around in the US thanks to the various Fed facilities that the significance of the Chinese move may not be as obvious as it would otherwise be.

$586 billion is a massive number for an economy the size of China's. Recall our first stimulus package here was $150 billion, and a second that is assumed to total $300 billion is under discussion. China's economy on a purchasing power parity basis is estimated to be about $7 trillion dollars as of 2007, versus its size at then current exchange rates of just under $3 trillion. By contrast, the US economy was just under $13 trillion, so if you accept the larger PPP value, the Chinese stimulus package would be tantamount to a $1.1 trillion program here (and even larger if you use the nominal exchange rate).

An offsetting factor is that our first stimulus package was a single shot, while the total amount of the Chinese initiative will be deployed over two years. The report in the Wall Street Journal also suggests that some of the spending may have already been in the works (ie, there may be some double counting).

Nevertheless, this means, as we have suggested, that the Chinese economy is likely decelerating faster than was commonly believed. It also means the Chinese officialdom is not at all willing to let growth slow far enough to risk social unrest. It will take some time to discern whether they succeed in the latter objective."

So the Chinese stimulus is equivalent to a more than a $1.1 trillion dollar stimulus here. It is to be spent over two years.

Brad Setser makes some good points:

"China’s policy response is directionally right. A large domestically oriented stimulus is exactly what is needed. $585 billion is over 10% of China’s GDP – so it is large. At least it if it is really new money.

Unfortunately, as the FT’s Geoff Dyer notes, that isn’t clear yet. If the stimulus is mostly just funds that China would have spent in any case, its actual impact will be modest. But if it is real new money, it could be large enough to make a difference.

The big question though is whether it can be put into effect quickly enough to offset the likely downturn.

It isn’t totally inconceivable that the y/y increase in China’s exports could go from over $250 billion to something close to zero …

China’s financial sector doesn’t rely on financing from the international banking system. That leaves it in a better position than other emerging economies. On the other hand, China has relied more than most on external demand to support its growth – which is a problem in a global context when external demand is disappearing. Let’s hope China can reorient its economy quickly …"

So, it's important to actually verify the numbers and the spending. It's huge.

Here's some earlier info.

Via Matt Yglesias, Ben Furnas gives a higher comparable U.S. number:

"This emergency spending by the Chinese government will invest “the equivalent of almost a fifth of its gross domestic product last year on infrastructure.” The $568 billion is approximately 18% of China’s $3.3 trillion 2007 GDP.

An equivalent investment by the United States government in infrastructure and emergency spending would cost over $2.4 trillion, or 18% of the United States’ $13.8 trillion 2007 GDP.

This is 15 times the size of Speaker Pelosi’s proposed two-part $160 billion stimulus, and 12 times the size of Center for American Progress’ “Green Recovery” proposal that would invest $200 billion in green infrastructure and alternative energy priorities over two years."

His figure of $2.4 trillion is significantly higher, even spread out over two years. It's still very, very big.