BEIJING - Most Chinese enterprises remain bullish about the outlook of the domestic economy and are optimistic about the employment prospects over the next year despite increased global economic volatility, a survey showed on Wednesday.

An overwhelming 86 percent of Chinese companies said that they believe the domestic economy remains stable or is modestly improving, a survey by accounting firm Ernst & Young Inc showed.

The survey was conducted in July and August, when the declining growth in the United States coupled with that country's credit downgrade and the escalating sovereign debt crisis in Europe sparked dramatic stock market activity.

More than 1,000 senior executives from 51 countries and regions participated in the survey. Sixty-three respondents were from China - senior executives of companies in a wide range of industries including automotive, consumer products, financial services, manufacturing, energy and resources.

Despite concerns over weakening global growth, 65 percent of Chinese respondents were optimistic about the long-term global economic outlook. Forty-one percent of them said they expect to expand their work force, and only 6 percent expected to cut jobs.

The survey also found that most Chinese enterprises are comfortable with their financial positions and few felt the need to refinance, with only 9 percent saying they will raise funds over the next 12 months.

"The weak sentiment for capital refinancing is probably due to the softening market for IPOs, which has been a main source of capital for Chinese companies" said Alex Zhu, transaction advisory services partner at Ernst & Young.

However, Chinese enterprises are slightly less bullish about pursuing acquisitions than their global peers. Only 35 percent of Chinese companies expect to pursue mergers and acquisitions in the next 12 months, compared with just under 41 percent of global companies, according to the survey.

"Chinese companies have the resources for potential deals but they remain cautious because of the valuation levels," said Eleanor Wu, transaction advisory services partner at Ernst & Young.

Only 3 percent of Chinese companies expect asset valuations to decrease compared with 16 percent of the global respondents, according to the survey.

On the capital management issue, capital preservation and investment remain the priorities for Chinese companies with 35 percent of them saying that they place the greatest attention and resources on capital preservation and investment.