When China announced its colossal $600-billion stimulus package back in November, we cautioned investors against irrational exuberance on the overall impact it would have on commodities, stocks and heavy equipment.

Now that the dust has cleared, it appears that the China plan is not entirely as big as advertised — further diminishing the halo effect on the global economy.

When originally unveiled, China’s $600-billion plan proposed a massive infrastructure build-out through 2010 to help create jobs and shift the country away from it’s over-reliance on exports, which have suffered from the global recession.

The announcement was framed as a brand-new initiative. The blueprint China laid out before the world included projects for low-cost housing, airports, roads, highways and aid to farmers. Pundits saw the investment by China as an overnight boom for raw materials, although we took a wait-and-see approach.

Asian stock markets surged on news. Japan’s Nikkei index jumped 5.8% while Hong Kong’s Hang Seng index gained 3.5%. In China, the Shanghai Composite index jumped 7.3%.

So much for the herd…

Because it now seems that many of the projects China had included as part of the $600 stimulus were already in the works prior to the big announcement. So what had initially appeared as a grand stimulus turned out to be a staged PR event.

Reuters recently characterized the stimulus package as comprised of “old budget commitments, double-counting and empty promises. It was thus mainly propaganda, to convince China’s own people and the outside world that the government was serious about stimulating demand at home.”

Reuters quoted Shanghai Citigroup Ken Peng as saying, “The stimulus package is big, but it’s actually a combination of a lot of things that have already been announced.”

A glaring example of China’s PR machine in action is that the $600-billion package included nearly $3 billion that Beijing had already earmarked for rebuilding in Sichuan province and other regions devastated by the earthquake earlier this year.

The stimulus plan also called for some $292 billion on the railway system. But Ting Lu, a Merrill Lynch analyst, reported that most of it had been previously allocated. He pegged the real number at $58 billion of new funds — still a sizeable number but far short of what China led the world to believe.

Given China’s lack of transparency, the ultimate net number of new funding will be almost impossible to ferret out. But in the end, it becomes increasingly apparent that Beijing is playing a shell game with investors. You can try to figure out where the pea is, or put your money someplace else.