China's cut in banks' benchmark lending and deposit rates by 108 basis points came a day after the World Bank said Chinese growth next year would be around 7.5 percent, the slowest rate since 1990.
The People's Bank of China (PBOC) also reduced reserve requirements by 1 percentage point for big banks and by 2 percentage points for smaller banks.
"It's certainly a lot more aggressive than anything they've done recently. I think it speaks volumes about just how much China has slowed down," said Anthony Muh of AT Asset Management in Hong Kong.
The European Commission approved a package it hopes will be taken up by EU member states aimed at giving the sagging European economy a sharp, temporary boost with a 200 billion euro ($260 billion) spending plan across the 27-nation bloc, an EU source said.
The plan, bigger than initially thought, calls for a targeted and temporary fiscal stimulus of 1.5 percent of EU gross domestic product. National measures would account for around 170 billion euros, or 1.2 percent of GDP, and EU and European Investment Bank budgets around 30 billion euros.
The Commission wants the EU's 27 countries to unite on a two-year dash for growth, even if it means breaking the region's national deficit targets.
Leaders from the bloc will study the plan at a December 11-12 summit.
The Chinese and EU moves come a day after U.S. officials announced $800 billion in programs to boost consumer and small business lending, adding to trillions of dollars committed to easing turmoil in the global financial system.
Some EU countries were cautious. German Chancellor Angela Merkel warned EU partners against competing to produce big stimulus packages for their economies and defended her plans for Germany as policies of "measure, middle ground and reason." (nLQ608609)
Germany and Britain have already launched stimulus programs, and France is poised to. Berlin said it assumed its existing plan would be enough.
STUMBLING
Company news reinforced the view that the global economy was stumbling badly.
In Japan, Toyota Motor Corp had its top-notch credit rating cut for the first time in a decade.
In the United States, upscale jeweler Tiffany & Co and farm equipment maker Deere & Co scaled back their earnings forecasts, indicating no end in sight to the downturn.
"It is impossible to know when consumer confidence will be restored," Tiffany CEO Michael Kowalski said.
Toyota's long-term foreign and local debt ratings were downgraded to AA from AAA, with a negative outlook, by Fitch Ratings.
"The negative developments in the industry are so substantial and fundamental that even the strongest player -- Toyota -- can no longer support an 'AAA' rating," said Fitch Director Tatsuya Mizuno.
Other U.S. data was bleak. Consumer confidence hit a 28-year low (nN26332787), new-home sales and prices both dropped (nN26362778), and an index of regional business activity contracted at a more severe rate than expected (nN26341586).
In Cairo, European Central Bank President Jean-Claude Trichet said the bank could cut interest rates next week as long as there was evidence that inflation pressures have eased.
There is -- German inflation likely slowed for a fourth month running in November as fuel costs fell, pointing to easing price pressures in the broader euro zone, state data showed.
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