HONG KONG, Nov 26 - Investors are already rewarding China for its massive government spending spree and could spread their money to its neighbours, hoping that emerging Asia's most important economy can jumpstart the entire region.

Like many governments globally, China is frantically trying to spend its way out of trouble, throwing money at roads, rails and other projects to soften the blow of a worldwide downturn.

However, unlike the United States, Europe and developing nations, China and some other economies in Asia have the deep savings and solid financial base to spend more without completely blowing their budgets, fund managers and economists said.

"Markets see that Asia is starting to act aggressively in terms of fiscal stimulus and the key is that they can do more," said Anthony Chan, Asia sovereign strategist with AllianceBernstein in Hong Kong.

"The market will not penalise countries like Hong Kong, China, Korea, or Taiwan if they run a fiscal deficit that is around 2 percent of GDP, if these are the right policies to mitigate downside risk."

The policies are also proving attractive to investors, who had dumped emerging market assets heavily in October as a global crisis that started last year took a sharp turn for the worse following the collapse of Lehman Brothers.

Last week China equity funds attracted a net $392 million in capital, helping Asia ex-Japan post its first week of inflows since early September, according to research firm EPFR Global and as other emerging market equity funds continued to bleed capital.

To be clear, while tax cuts and housing and energy subsidies can quickly spur consumption, other spending, such as on infrastructure projects, can take months to be reflected in economic data. That means growth is unlikely to pick up until late in 2009 at the soonest.

Still, Asia's policymakers have not had to fork out billions to save their banks, unlike in many Western countries, leaving more cash available to try to stimulate growth.