Adds Dimon's comments from a close door event during the summit, recasts the story

By Li Gu and Selena Li

SHANGHAI/HONG KONG, May 22 (Reuters) - JPMorgan Chase JPM.N Chief Executive Jamie Dimon said on Thursday U.S. President Donald Trump's massive tax and spending bill could help bring stability but it is not conducive to deficit reduction.

The bill cleared a crucial hurdle on Wednesday, as the U.S. House of Representatives voted roughly along party lines to begin a debate that would lead to a vote on passage on Thursday.

"I think they should do the tax bill. I do think it'll stabilise things a little bit but it'll probably add to the deficit," Dimon said at JPMorgan's Global China Summit in Shanghai.

Reuters obtained a recording of Dimon's remarks made at the closed-door event. JPMorgan did not immediately respond to a Reuters request for comment.

The new bill is estimated to add $3.8 trillion to the U.S. government's $36.2 trillion in debt over the next decade. Credit rating firm Moody's last week stripped the U.S. government of its top-tier credit rating over the mounting national debt.

"I think the deficit will be large and probably growing," Dimon said from Shanghai, where the Wall Street firm's China business is based.

Dimon called for "responsibility" in spending, and warned governments could spend money while failing to spur growth.

"It's not just the United States, but governments have shown an amazing ability to spend your money not wisely, set rules and regulations to slow down growth," he said.

Dimon said efficient budgeting, planning and investing would drive growth and effectively help reduce the deficit.

"But I don't think you see it on the big, beautiful bill," he added, referring to the legislation proposed by Trump.

Dimon told Bloomberg News earlier in the day that he couldn't rule out that the U.S. economy will fall into stagflation as the country faces huge risks from geopolitics, deficits and price pressures.

He said the U.S. Federal Reserve was doing the right thing to wait and see before it decides on monetary policy, Bloomberg News reported.

Earlier this month, the Federal Reserve kept interest rates steady but warned that the risks of higher inflation and unemployment had risen, further clouding the U.S. economic outlook.

"I think the chance of inflation going up and stagflation is a little bit higher than other people think," Dimon had previously said.

(Reporting by Li Gu in Shanghai and Selena Li in Hong Kong, Rajveer Singh Pardesi in Bengaluru; Editing by Mrigank Dhaniwala and Susan Fenton)

((RajveerSingh.Pardesi@thomsonreuters.com;))