Sixty percent of urban residents felt prices remained high in the fourth quarter, 0.5 of a percentage point up from the previous quarter.

Most entrepreneurs, bankers and urban residents were pessimistic about prices in the first quarter of 2007, believing inflation pressures were "accumulating", according to the survey.

But the percentage of those who considered the price level "unacceptably high" dropped slightly for the first time this year,due to salary increases for civil servants and seasonal pay rises for urban residents.

The percentage data for this figures was unavailable in the central bank's report.

China's consumer price index (CPI), the country's main measure of inflation, will rise two percent in 2007, compared with this year's predicted 1.4 percent, according to a central bank forecast.

The index is expected to climb from 1.8 percent in the fourth quarter this year to 2.2 percent in the second quarter next year. Then it will fall to 1.8 percent again at the end of 2007.

The survey also showed the sale price index rose 1.1 percentage points to reach a 10-year high in the fourth quarter, confirming beliefs that prices are high.

Meanwhile, purchase prices of production materials dropped three quarters in a row, continuing to enable enterprises to reduce production costs and expand profits.

Fifty-four percent of the bankers surveyed and 86.8 percent of entrepreneurs said China's economy performed "normally" in the fourth quarter, compared with 25.1 percent and 83.8 percent respectively in the third quarter.