BEIJING (Reuters) -China's business confidence fell to its lowest since January 2013, a survey by World Economics showed on Monday, reflecting the impact of surging COVID-19 cases on economic activity with the abrupt lifting of many pandemic control measures.

The index fell to 48.1 in December from 51.8 in November, showed the World Economics' survey of sales managers at over 2,300 companies conducted Dec. 1-16. The index was the lowest since the survey began in 2013.

The survey results were among the first indicators of how business sentiment has taken a hit in the world's second-biggest economy, after the sharp relaxation of strict COVID containment measures on Dec. 7 triggered a still-growing wave of domestic COVID cases across China.

"The survey suggests strongly that the growth rate of the Chinese economy has slowed quite dramatically, and may be heading for recession in 2023," World Economics said.

China's GDP is expected to grow just 3% this year, its worst performance in nearly half a century.

The survey showed business activity fell sharply in December with the sales managers indexes in Manufacturing and Service Sectors both below the 50 level.

"The percentage of companies that claim to be currently negatively impacted by COVID has risen to a survey high, with more than half of all respondents now suggesting their operations are being harmed in one way or another," the London-based data provider said.

China has recently dismantled some key parts of the world's toughest anti-COVID curbs and lockdowns. The measures were championed by President Xi Jinping but impaired the economy and sparked popular protests unprecedented in his decade-long rule.

The top leaders and policymakers will focus on stabilising the economy in 2023 and step up policy adjustments to ensure key targets are hit, according to an agenda-setting meeting ended on Friday.

"It may take at least another quarter before things turn around," said Dan Wang, chief economist at Hang Seng Bank China.

"Many small businesses have run out of liquidity, especially restaurants, gyms, hotels and other city services."

(Reporting by Liangping Gao, Ryan Woo and Joe Cash; Editing by Stephen Coates and Christian Schmollinger)