South Korean firms are upbeat about business prospects in China this year, a report by the Federation of Korean Industries (FKI) said Monday.

The report was based on a business survey index (BSI) survey carried out on 103 branches of South Korean firms in China. The overall index score was 111.7.

A BSI reading exceeding 100 means optimists outnumber pessimists, with more companies expecting better times ahead.

By individual sector, the BSI for domestic sales stood at 123.9, with exports back to South Korea standing at a high 134.6.

The forecast for exports to countries outside of South Korea stood at 121.4, with investment and liquidity standing at 119.4 and

110.3, respectively.

The latest findings also revealed companies were expecting better times in terms of hiring of workers and profitability, with figures of 107.5 and 125.0, respectively.

China is South Korea‘s largest trading partner, and better business conditions there are positive for the economy at home.

Related to the results, the FKI, a lobby group for large family-run conglomerates, said forecasts reflected optimism that U.S. and Europe will pull off solid growth this year that translates into more exports for China. It said that predictions of consumption growth in China and overall stability in international crude and commodities prices are bolstering business sentiment.

The FKI also said the high numbers increase the likelihood of Beijing maintaining a stable economic policy stance this year.

On the downside, companies polled expressed concerns about rising competition, shortage of workers and higher wages eating into profitability.

Some said that restrictions imposed by authorities remain an obstacle to doing business in the country. (Yonhap News)