Beijing, Feb 11 - Rising manufacturing costs and weak external demand for China-made goods have dented the profits of industrial hubs in southeast China.

Industrial output in Guangdong surged 20.9 percent year-on-year in 2011, but industrial profits rose by only 2.4 percent, down sharply from over 30 percent annual growth in 2010, Xinhua reported Friday quoting the provincial statistics bureau.

In Zhejiang, industrial profits rose 9.9 percent year-on-year, 37.4 percentage points lower than the growth pace in 2010, officials said.

Small and micro-enterprises on the Yangtze river and Pearl river deltas and the economic belt surrounding the Bohai Sea were also squeezed by the credit crunch, rises in costs, and declines in orders, according to a survey by e-commerce group Alibaba and Peking University's National School of Development.

These enterprises have urged the government to tame inflation to reduce the impact of the increase in material and labour costs on profitability, and also cut taxes to reduce their operation burden. (IANS)