Chinese are feeling the squeeze of rising living costs, a central bank survey showed yesterday, indicating the pressure on policy makers to tame inflation.

The Consumer Price Satisfaction Index fell to 13.8 in the current quarter, the lowest since it was first released in the fourth quarter of 1999, the People's Bank of China said yesterday in a survey on its website.

The Consumer Price Index, the main gauge of inflation, rose 5.1 percent in November, a 28-month high. Food prices jumped 11.7 percent last month, also the most since July 2008.

"The key risk to the economy is inflation for the time being," said Qu Hongbin, chief economist of HSBC in China. "The government should focus on curbing inflation in the coming months."

The survey of 50,000 people in 50 cities found that 74 percent of households said prices are too high, up 15.6 percentage points from the third quarter. Inflation expectations are intensifying, as 61 percent of respondents said they expect prices to rise further in the next quarter. In the previous survey, the proportion was 46 percent.

China's leaders wrapped up an annual economic planning meeting over the weekend. They pledged to keep growth on track in 2011 while stepping up moves to combat inflation.

"We believe that China wants stable growth focused more on quality than quantity, which in turn allows for more measures to keep inflation in check," Qu said.

China increased interest rates in October, the first rise in nearly three years.

The benchmark one-year deposit rate is 2.5 percent, and the lending rate is 5.56 percent after October's quarter-point rise.

However, the real savings rate is negative 2.6 percent when the November inflation rate is subtracted from the deposit rate.

Economists are expecting more interest rates increases next year to counter inflation.

The negative savings rate is also driving individuals to shift deposits to investments.

"It's natural for households to seek higher returns through investments against a negative savings rate," said Stephen Green, Standard Chartered's head of research in China.

Homes, funds and stocks are the top three investment options for people seeking higher returns. The survey also found individuals were less likely to spend money on big-tickets items such as cars and trips.