The confidence of Chinese small and medium-sized enterprises (SMEs) began to stabilize but remained in the territory of pessimism in the fourth quarter of 2012, after declining for two quarters in a row, a survey report said today.

The China SME Confidence Index, a quarterly measure of small business sentiment, edged up to 47.28 in the fourth quarter last year from 46.71 in the third quarter, the Standard Chartered Bank said in a report.

A reading of 50 divides optimism from pessimism.

Geographically, the Index for north China rebounded and was slightly ahead of that for east, south and west China, the bank said.

The average reading for 2012 stood at 51.44. A weak global economy, China's economic transformation and a slowdown in fixed asset investment combined to drag down the index the second and third quarters, according to the report.

The lender said economic recovery will become more obvious this year. The manufacturing and investment aspirations of SMEs are expected to be further inspired during the gradual economic recovery.