Li Ka-shing, Asia's richest man, said China's stock valuations "must be a bubble" and prices are likely to decline.

"As a Chinese, I'm worried about the stock market in China," Li, 78, told reporters in Hong Kong Thursday. He joins central bank Governor Zhou Xiaochuan in saying China's stock prices are excessive and spoke a day after Premier Wen Jiabao warned of "problems" for the economy.

China's benchmark CSI 300 Index rose 2.1 percent Thursday, bringing gains this year to 85 percent. The measure closed at a record as the government said investment in factories and real estate jumped 25.5 percent in the first four months. The economy grew 11.1 percent in the first quarter

"Domestic investors are getting too sanguine about investing in the market," said Teo Joo Wah, who helps manage about $2 billion at Fullerton Fund Management Co., a unit of Singapore's state-owned investment company Temasek Holdings Pte.

China's CSI 300 has a valuation of 43 times estimated earnings. Hong Kong's Hang Seng Index, which has gained 5.2 percent in 2007, is at 16 times.

The number of brokerage accounts set up to buy mainland shares and mutual funds amounted to 327,019 Wednesday, according to the China Depository & Clearing Corp. Investors opened a record 385,121 new accounts on May 8.

"You've got to be cautious when you see that many investment accounts being opened," Fullerton's Teo said.

ADRs Fall

The Bank of New York China ADR index, which tracks American depositary receipts of Chinese companies trading in the U.S., slipped 1.7 percent as of 10:31 a.m. in New York. Shares of China Life Insurance Co., the country's largest insurer, dropped 64 cents to $50.12 on the New York Stock Exchange. China Telecom Corp., the nation's biggest fixed-line telephone carrier, declined $1.84 to $54.64.

Comments from Li resonate in Asia and in Hong Kong, where he's known as "Superman" for his investment acumen.

He invested in the Hong Kong initial public offering of Industrial & Commercial Bank of China Ltd., while his flagship property company Cheung Kong (Holdings) Ltd. and a separate Li foundation each bought $10 million of shares in the April share sale of China Molybdenum Co. The stock has since risen 84 percent.

'Right Calls'

"Mr. Li has a reputation of making the right calls," said Kenny Tang, associate director at Hong Kong-based Tung Tai Securities Ltd. "But I don't think his comment will immediately trigger a panic sell-off. It'll probably remind people to be more cautious and stay alert."

Investors are flocking to the stock market to benefit from rising corporate earnings in an economy that has grown 10 percent in each of the last four years. Profits at Chinese companies listed in the A-share market grew 82 percent in the first quarter from a year earlier, beating analyst estimates, Goldman Sachs Group Inc. said in a May 10 research note.

The rise in China's shares has made the nation's stocks the most expensive among the world's major markets. Goldman Sachs and Credit Suisse Group analysts have in the past week said they may face a "correction."

The government has said it will try and slow the pace of economic growth to prevent a bubble. Premier Wen Wednesday said excess liquidity is a concern.

"We'll take a number of measures to strengthen our control of the economy," he told the African Development Bank's annual meeting in Shanghai.

Watching Prices

People's Bank of China Governor Zhou on May 6 said a bubble may be building in China's share market. While there is no evidence that inflation is getting out of control, the central bank is watching asset prices, he said.

The central bank has raised interest rates three times since April last year and increased bank reserve ratios seven times.

A slump in China's stocks may be felt beyond its borders. A record 9.2 percent plunge in the CSI 300 on Feb. 27 triggered a five-day rout that wiped more than $3.3 trillion from the market value of equities worldwide.

The CSI 300 Thursday climbed 2.1 percent to a record 3778.60, the biggest increase among markets included in global benchmarks. The index has almost tripled in the past year.

Li's influence on Hong Kong investors was evident in trading Thursday. Shares of Cheung Kong, the city's biggest developer by value, climbed 2.4 percent after stock exchange filings showed that Li raised his stake in the company to 39.29 percent from 39.21 percent.

'I'm Confident'

"I know my company well and I'm confident in its future," Li said. He was speaking after the annual general meeting of Cheung Kong.

Cheung Kong and its unit Hutchison Whampoa Ltd. bought shares in ICBC's $22 billion IPO, the world's largest ever stock sale. The company's Hong Kong shares have risen 39 percent since listing on Oct. 27.

Li also bought shares in China Molybdenum's $1 billion IPO. Shares of the company, the country's second-biggest producer of the material used to toughen steel, surged 59 percent on its April 26 debut.