The world’s fourth-largest economy is delivering a shot to its own arm as a global slowdown continues to hurt its exchange traded funds (ETFs).

China’s ETFs were among the top performers in 2007, before they began a downhill slide earlier this year that has left them more than 60% below their highs.

Now the country’s leadership is taking the bull by the horns by passing a $586 billion bailout package.

The plan calls for more spending on infrastructure, tax deductions for exporters and more aid to the country’re poor and farmers, reports Joe Mcdonald for the Associated Press. Alarm bells have been sounding in China, where exporters say that orders have fallen drastically while economic growth has slowed to 9% in the third quarter, the lowest level in five years. Analysts expect export growth to slow to zero in the coming months.

The rest of the world appears to approve of China’s stimulus plan, as European and Asia markets have traded higher today. Britain is expected to unveil its own plan this month, while the United States may have a new plan after Barack Obama takes office in January.

iShares FTSE/Xinhua China 25 (FXI) is down 54.4% year-to-date.

As the world rallies around China’s plan, oil prices have jumped to close to $64 a barrel. The jump owes to the weakening of the U.S. dollar that’s driven in part by the stimulus plan, says Dirk Lammers for the Associated Press.

Where oil goes from here is a matter of debate. Some think if the prices fall lower, OPEC will call another meeting and announce a production cut. In the long-term, some analysts feel that rising global demand will ultimately push prices higher again.

United States Oil (USO) is down 34% year-to-date.

Tags: Asia, China, Emerging Markets, Energy, FXI, Obama, Oil, USO