Small and medium-sized companies in Shanghai experienced a slowdown in profit growth in the first half of this year, with some facing bankruptcy, showed a recent survey among 200 small and medium enterprises in Shanghai, reported the Oriental Morning Post.

Banks prefer mega cities, mega industries and mega corporations, and civil loans are costly and risky, the paper cited business owners as saying. Labor shortage and rising material costs have also contributed to the slow growth.

People's Bank of China, China's central bank, hiked interest rates three times this year to curb inflation, making it difficult for small and medium businesses to get bank loans.

By Sun Yuanqing