China will step up support for smaller enterprises in a bid to shore up support for sectors hit by the novel coronavirus, increasing financing quotas of small- and medium-sized banks by one trillion yuan ($140 billion), state media reported Tuesday.

A State Council meeting presided over by Premier Li Keqiang said authorities would guide smaller banks to lend all the funds they receive to small- and medium-sized enterprises at preferential rates.

The Communist Party's decision-making politburo had called last Friday for stronger counter-cyclical policy measures and a step-up in stimulus, as the pandemic ravages the global economy.

On Tuesday, state broadcaster CCTV reported that following a State Council meeting on the same day, China decided to issue another batch of local government special debt quotas to boost investment.

To support the automobile sector -- which has been badly affected -- the meeting also decided China would extend the policy of subsidies and purchase tax exemptions for new electric and hybrid vehicles for two years.

The coronavirus has claimed almost 40,000 lives globally, with its worldwide spread dampening hope of a sharp recovery in export-dependent China.

Beijing's recent moves come as governments and central banks around the world ease monetary policy and unveil stimulus measures worth around $5 trillion to counter the economic impact of the coronavirus -- which forecasters warn will cause a deep recession.

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