* China approves nearly $600 billion economic stimulus
* Leading economies pledge action to fight recession
* Taiwan cuts interest rates again
* Aides say Obama to stick to reforms, tax cut plans
By Kirby Chien and Anna Willard
BEIJING/SAO PAULO, Nov 9 (Reuters) - China approved a huge stimulus plan on Sunday worth nearly $600 billion, part of a new global push by leading economies for measures to offset an expected recession in many countries.
In Brazil, finance ministers and central bank governors representing 90 percent of the world's economy said they would work on ways to fend off the backlash of the credit crisis, either through higher spending or further interest rate cuts.
Many developed economies are now facing a contraction next year after lending from banks suddenly dried up, and emerging economies such as China are feeling the domino effect.
World leaders meet in Washington next weekend to try to agree on what kind of measures their governments need to prepare in the coming months, and to discuss the lessons learned from the credit crisis.
China's official Xinhua news agency said the world's fourth-largest economy approved a 4 trillion yuan ($586 billion) government spending package between now and 2010, focused largely on infrastructure and social projects.
The move was hailed by the head of the International Monetary Fund, Dominique Strauss-Kahn, who said it would have a positive domino effect on the world economy.
China's State Council, or cabinet, also announced a shift to a "moderately easy" monetary policy, possibly foreshadowing further reductions in borrowing costs on top of three interest rate cuts made since mid-September.
"This is pretty major," said Arthur Kroeber, head of Dragonomics, a Beijing economic consultant. "It reflects the official view of how serious this problem is and shows that this is a government that can mobilize enormous resources to stimulate the economy when they put their minds to it."
By comparison, the United States sent out about $100 billion in tax rebate checks this summer, while Germany last week agreed to a 50 billion euro pump-priming plan.
China's central bank governor, Zhou Xiaochuan, said on Saturday the Asian export powerhouse, one of the few remaining engines of global growth, expected economic expansion of between 8 percent and 9 percent in 2009.
Some economists have predicted growth in China rate could slow to less than 8 percent next year, down from double-digit levels in the past five years until this year.
Also on Sunday, Taiwan's central bank unexpectedly cut interest rates by 25 basis points, its fourth reduction in just over a month as fears of a global recession threatens the export-led economy.
In the United States, which is heading for a bleak 2009, senior aides to President-elect Barack Obama said the crisis would not stop him from expanding health care, overhauling education and energy policy, and passing a middle-class tax cut soon after he takes office in January.
NEED FOR COORDINATED ACTION TO DEAL WITH CRISIS
In Brazil, ministers and other finance officials said there was a need for further moves to boost growth by other countries, including possible spending splurges or more interest rate cuts by some countries.
"There is consensus that we need coordinated action to deal with the crisis," Brazilian Finance Minister Guido Mantega told reporters after an annual meeting of the G20 group of advanced and big emerging economies, which was dominated by the crisis.
"It requires global action and so there is a need for institutions that are suitable for this kind of common and coordinated action. This has not yet been resolved but the G20 is a strong candidate to be the coordinator."
Brazil and other emerging economies have demanded more of a voice in management of global finance that has long been the preserve of rich countries, which are members of the G7 group.
South African Finance Minister Trevor Manuel told reporters the G7 can no longer be "a little club on its own."
In a communique, the G20 saw the need for comprehensive reform of the Bretton Woods institutions, such as the IMF and the World Bank, "so that they can more adequately reflect changing economic weights in the world economy and be more responsive to future challenges."
The declaration also called for regulation or oversight of all sectors of the financial industry, "as appropriate," language that appeared to reflect differences between countries over how sectors such as hedge funds should be treated.
In Europe, the main stimulus for growth would come from interest rate cuts, French Finance Minister Christine Lagarde said, reiterating her previous comments that a new European Central Bank rate cut was possible "in the next few weeks." (Writing by William Schomberg, Editing by Todd Benson and Maureen Bavdek)