In the survey, companies with less than 300 employees worldwide were counted as SMEs. "On average, all companies see their sales and profits improving in 2014," Musy said. "Respondents from SMEs see their profits increasing significantly faster than their colleagues from larger firms."

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The Business in China 2014 survey is based on the responses from more than 1,000 companies and is the only survey that collect responses from Chinese as well as foreign companies in China. The survey had responses from 104 Swiss firms in China.

"A possible reason for the strong success of SMEs is probably an environment that has a lower level of competition," Musy said.

"This lower level of competition and challenges could well be due to the SMEs' very nature of doing business: focusing on niches."

Based on the profit and revenue picture, 64 percent of the Swiss companies plan to increase investment in China in 2014 and more than half of them consider China among the top three investment destinations, the survey found.

The key management challenge for international companies in China remains finding and retaining human resources, Musy said.

Lack of understanding and support from the head offices is the second most important management challenge for international companies and an issue for 30 percent of them.

The survey also found that international companies in China now perceive local private players as their greatest competitors, a marked shift from the past years when respondents said international companies posed the greatest competition.

Founded in 2000, Swiss Center Shanghai is the largest cluster of Swiss businesses in Asia, with experience in business setup, expansion and operations management.