Obama says long haul ahead, China offers help

US President-elect Barack Obama said yesterday he was crafting a two-year plan to fight an economic crisis of "historic proportions" and Chinese leader Hu Jintao said his country was ready to play a big role in the global effort.

In another sober assessment, billionaire investor George Soros said the US economy needed an additional $300 billion to $600 billion in support funds to help it withstand a financial crisis which he said "has exceeded my most daring expectations".

The corporate scenario also darkened, with US automaker General Motors Corp considering "all options", including bankruptcy, because of its liquidity problems, according to the Wall Street Journal.

And banker Citigroup Inc began talks with the US government amid doubts about its ability to survive.

"There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better," said Obama, who takes over from US President George W. Bush on January 20.

He was speaking in a radio address one day after US stock markets rallied on word that he had chosen the New York Federal Reserve president, Timothy Geithner, as Treasury secretary.

Obama gave a bleak view of the situation, saying swift and bold action was needed to prevent a deep slump, a spiral of falling prices, and millions of job losses.

He signalled he was prepared to push for a much larger package than the $175 billion stimulus measure he called for in his election campaign. His plan would set a goal of creating 2.5 million more jobs by January 2011 - a two-year scenario.

"The news this week has only reinforced the fact that we are facing an economic crisis of historic proportions," Obama said.

Chinese President Hu, speaking in Lima, Peru, said the Asian powerhouse would work alongside the international community to strengthen co-operation and protect international markets.

China has been a major driver of the world economy as its rapid expansion fuelled demand for raw materials. But with so many troubled countries looking to China to ease their financial woes, Beijing has until now been wary of taking a leading role.

"China is within the scope of its abilities taking major efforts to address the financial crisis," Hu said in a speech to business leaders. This included providing support for liquidity for domestic financial institutions and co-ordinating macroeconomic policy with other countries.

Hu is in Lima for a summit of leaders from Asia and the Americas within the Asia-Pacific Economic Co-operation (APEC) forum, whose countries represent more than half of global output.

They are expected to ratify previous commitments by the Group of 20 powerful world economies to use trade and government spending to combat the economic crisis.