BEIJING (Reuters) - China's cabinet has unveiled detailed measures, including widening financing channels for firms and establishing new equity funds, to support investment and economic growth.

The government will widen financing channels for firms and support asset securitization, allowing investment projects to raise funds in corporate bond markets, according to guidelines issued by the State Council.

China will establish market-based industrial equity investment funds and encourage participation of banks, insurance firms and the national social security fund, according to the guidelines published on the central government's website.

The steps will help "deepen investment and financial system reforms and let investment play a key role in stabilizing economic growth, adjusting the economic structure and improving people's livelihood", the cabinet said.

The cabinet pledged to simplify approval procedures for firms when they make investment decisions and tackle the problem of elevated borrowing costs for investment projects.

China will launch pilot schemes to allow financial institutions to hold stakes in companies and speed up market-based transformation of local government financing vehicles, the cabinet said.

The government will push reforms to lure more private investment into railway, petroleum, natural gas, power and telecommunications sectors, partly via the public-private partnership (PPP), according to the guidelines.

China's economy expanded slightly faster than expected in the second quarter but private investment growth shrank to a record low, suggesting future weakness which could pressure the government to roll out more support measures.

(Reporting by China Monitoring Desk and Kevin Yao; Editing by Jacqueline Wong)