Yangtze River Delta small businesses' profits declining

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Nearly 55 percent of small and micro-sized enterprises in the Yangtze River Delta, one of China's key economic centers, reported annual declines in net profits over the past six months, according to survey results released on Tuesday.

Only about 15 percent of the questioned businesses said they posted year-on-year rises in net profits, showed the survey by e-commerce group Alibaba and Peking University's National School of Development.

The findings were based on questions put to 2,343 small and micro-sized firms in Zhejiang, Shanghai, Jiangsu and Anhui.

Meanwhile, 50.2 percent of the respondents said their sales declined year on year in the past six months as the sluggish global economy took its toll on their corporate performance.

Declining orders for their goods from both domestic and overseas customers was the top factor to hit business, followed by rises in labor and materials costs.

Due to weak demand, the companies surveyed were running at less than 70 percent of their production capacity.

In addition, about 40 percent said they had smaller workforces compared with a year ago.

The weak market demand also curbed businesses' willingness to expand production. Only a third said they had fund-raising plans.