In the midst of a slowdown of the US economic recovery and the possibility of a double-dip recession in Europe, US mid-sized businesses are remaining cautious about borrowing. But they are also relying less on cost cutting for growth, opting instead for international expansion, which could in turn boost the US economy.

According to a survey of nearly 650 US senior financial executives polled by HSBC's commercial banking division, US mid-sized businesses continue to express some caution, which is evident in their reluctance to take on new debt. "A surprising 60 percent of respondents stated that they have not applied for an increase in their credit line or for a new credit line in the past 12 months," HSBC said in a press release Monday.

But that doesn't mean US mid-sized businesses aren't preparing for future growth. More of them are investing in global growth initiatives to maintain their competitive edge rather than cutting costs and taking measures to brace for a downturn. Less than one third of surveyed businesses said they are reducing the number of employees at their companies, down from nearly half of respondents that reported staff reductions in the previous year.

Instead, financial executives are betting on growth from overseas: 72 percent of respondents said they would increase sales targets abroad, compared with only 56 percent last year and 49 percent in 2008. But although 56 percent of polled executives said their overseas are growing faster than domestic sales, that still below the 67 percent level seen in 2008.

In the short term, the UK and Canada are the countries cited as the most attractive countries to do business with. In the longer-term, China still carries the day, with 45 percent of respondents choosing China as the country with the greatest potential for US mid-sized businesses, followed by India and Canada.

Businesses with annual sales of between $20 million and $5 billion were surveyed by HSBC in mid April.