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China prepares $370bn package to fire up cooling economy

Debt concerns risk discouraging government from going all-out

Chinese workers labor at the construction site of the railway arch bridge with world's longest span of 490 meters across the Nujiang River on the 220-km-long Dali-Ruili railway in Baoshan city, southwest China's Yunnan province. (Photo by Imaginechina via AP Images)

BEIJING -- The Chinese government is ramping up stimulus plans to keep the economy moving along amid mounting pressure, planning more than 2.5 trillion yuan ($370 billion) in tax cuts and infrastructure spending while also encouraging wary banks to extend more credit.

The package, which has been taking shape since last fall, amounts to around 3% of gross domestic product. The 4 trillion yuan that the government pumped into the economy after the 2008 global financial crisis equated to 13% of GDP, suggesting that Beijing still has plenty of firepower at its disposal.

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