BEIJING - Nearly 80 percent of CEOs of leading privately-owned companies in China are optimistic, though with caution, about business prospect in the coming year, according to a survey released Monday.

The survey, conducted by the accounting firm Ernst & Young and the China-based Cheung Kong Graduate School of Business late last year, received feedback from 100 CEOs.

Twenty-eight percent of respondents said they expected big improvement in business growth in the coming 12 months, while 51 percent forecast slight improvement due to the gloomy global economy and China's slowdown, the survey revealed.

The CEOs, 67 percent of whose companies posted operating profit growth last year, acknowledged that they were facing increasingly daunting challenges, it said.

"The major problems facing the leading Chinese private businesses include cut-throat market competition, rising operating costs and difficulty in fund-raising," said He Zhaofeng, a managing partner with Ernst & Young.

The survey showed that 23 percent said fierce competition was a pressing challenge, while 39 percent said rising labor or materials costs were major problems.

Most respondents also said enterprises should have healthy cash flows and make sound investments under grim economic conditions, according to the survey.