Prime Minister Kevin Rudd says the economic stimulus package announced by the Chinese Government is very good news for the Australian and global economies.

The Chinese Government has announced plans to invest around $870 billion over the next two years on infrastructure, post-earthquake reconstruction and housing.

Mr Rudd says it is an "extraordinary" fiscal stimulus package, and shows China is prepared to take a leading role in efforts to solve the global financial problems.

"The Chinese authorities have spoken through the ... press today of the important of taking measures in a new pro-active approach to fiscal policy," he said.

"I regard that as very good news for this economy, very good news for the regional economy and very good news for the global economy."