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UPDATE 2-China to take more steps to support economy -state media cites cabinet

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BEIJING, Aug 24 (Reuters) - China will take more steps to support the economy, including increasing funding support for infrastructure projects and ramping up support for private firms and technology companies, state media quoted the cabinet as saying on Wednesday.

China will add 19 new policies on top of the existing steps unveiled in May, including raising the quota on policy financing tools by 300 billion yuan ($43.69 billion), state media cited the cabinet as saying after a regular meeting chaired by Premier Li Keqiang.

The country would make good use of carryover special bond quotas of 500 billion yuan and would support centrally owned power generations firms to issue 200 billion yuan in bonds, the cabinet was quoted as saying.

"Currently, the economy continues the recovery trend in June, but the foundation of recovery is not solid," the cabinet was quoted as saying.

Authorities will take "timely and decisive measures, maintain a reasonable policy scale and make good use of policy tools in the toolkit, and intensify efforts to consolidate the foundation for economic recovery," the cabinet added.

The cabinet, while reiterating that China will avoid excessive stimulus, has sent officials to provinces to check the implementation of the policy steps, state media said.

China will reduce funding costs and will approve a batch of infrastructure projects, the cabinet was quoted as saying.

On Monday, China cut its benchmark lending rate and lowered the mortgage reference by a bigger margin, as Beijing boosts efforts to revive an economy hobbled by a property crisis and a resurgence of COVID-19 cases.

China will unveil policies to support private firms and the platform economy which includes tech companies, it said.

It will allow localities to use city-based credit policies to reasonably support rigid housing demand, it said.

China has allocated 10 billion yuan in funds to support rice production amid drought, and will issue 10 billon yuan in subsidies for farm materials, the cabinet said.

China's economy narrowly escaped a contraction in the June quarter. Economic activity rebounded in June but slowed in July, raising pressure on policymakers to step up support.

In May, the cabinet announced a package of 33 measures covering fiscal, financial, investment and industrial policies to revive the COVID-ravaged economy.

Authorities have given policy banks 800 billion yuan in new credit quotas to fund infrastructure projects, and allowed policy banks to issue 300 billion yuan in bonds to help some key projects meet the minimum capital requirement.

($1 = 6.8666 Chinese yuan) (Reporting by Kevin Yao and Beijing newsroom; Editing by Alex Richardson and Bernadette Baum)

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