The CSI 300 Index fell less than half a percentage point today after former Federal Reserve Chairman Greenspan said gains are unsustainable and the market may undergo a "dramatic contraction." The benchmark has jumped 92 percent this year after more than doubling in 2006.

"Their comments are just like throwing small pieces of ice into boiling water, which won't cool down at all," said Wang Qing, 36, a full-time investor since leaving his job as a consultancy manager in Shanghai last year. "The investment mania is still going on."

China's stocks are the most expensive among the world's major markets after a rally that's drawn record numbers of investors. The number of brokerage accounts topped 99 million this year, with more than 300,000 opened daily. Students, pensioners and maids -- many with scant investment knowledge -- are among those who are using their savings and even living expenses to play the market, according to Chinese media reports.

"It's easier to make money from stock investment than work nowadays," said Hang Ming, 28, one of about 15 cooks from a local restaurant who were tracking stock prices at the Shenyin & Wanguo Securities Co. brokerage in Shanghai's Lujiazui district Thursday. "There's risk, just like in playing mahjong, but I don't care."

`Everyone Makes Money'

The CSI 300 trades at 45 times earnings, triple the ratio for the Morgan Stanley Capital International Emerging Markets Index. Japan's Nikkei-225 Stock Average trades at 23 times earnings, Hong Kong's Hang Seng Index is at 16 times, and the U.S. S&P 500 Index is on a multiple of 18.

"It is clearly unsustainable," Greenspan told a conference in Madrid yesterday by satellite. "There is going to be a dramatic contraction at some point."

China's stock regulator Wednesday ordered brokerages to make investors sign a declaration that they are aware of the risks when opening stock-trading accounts, a reflection of official concern at the growing numbers of inexperienced investors.

The CSI Index reached new records this week after Hong Kong billionaire Li said on May 18 that the market "must be a bubble." It's added 10 percent since May 6, when the central bank's Zhou said he was concerned about valuations. The index closed 0.49 percent lower Thursday after swinging between gains and losses.

"China is still a market that's not quite in line with international practice, so I wouldn't care too much about Greenspan," said Wu Ruiling, 68, a retired teacher.

Chinese stocks trading in the U.S. fell Wednesday after Greenspan's comments. Thursday, the Bank of New York Co.'s China ADR Index slid for a third day, losing 2.6 percent to 361.67 at 4 p.m. in New York. The index reached a record on May 21.

Earnings Growth

Wu said she's made a 60 percent return on her 500,000 yuan ($65,344) investment, buying shares such as Shenzhen Development Bank Co., controlled by buyout firm TPG. Shenzhen Bank shares have jumped 247 percent in the past year.

The rally has been driven by expectations that annual economic growth of more than 10 percent will spur corporate earnings. China has 17.2 trillion yuan ($2.25 trillion) of household deposits that have been earning less than the rate of inflation, encouraging savers to shift money into higher-yielding assets.

High Valuations

"Right now, valuations are relatively high, but if you look at liquidity, at the amount of domestic savings, that liquidity's got to go somewhere," said Sean Tseng, who manages about $50 million at Polaris Securities Co. in Hong Kong.

The central bank on May 18 raised the deposit rate to 3.06 percent from 2.79 percent to help cool investment. The government also this month allowed China's banks to buy stocks overseas for the first time, easing a ban that's contributed to the high valuations by limiting investment options.

Stock investing has so gripped the public that it has caused labor shortages, according to local media reports.

About 10 percent of maids in Shanghai have resigned because they make more money trading shares, the government-run Eastday Web site reported on April 24, citing a local employment agency.

A Shanghai training company has set aside half an hour twice a day for employees to play the market, the Oriental Morning Post reported on May 17, without identifying the company.

Maids, Monks

Shi Changxing, a 60-year-old monk, trades stocks from a computer in his room in a temple in Xi'an in northwest China, China Central Television reported on May 10, citing a local newspaper.

Shanghai investor Wang said he's made a threefold return on the 100,000 yuan he invested in the market in August. His profit is equal to 40 times his former monthly salary of 5,000 yuan.

Wang's picks include Hebei Weiyuan Bio-Chemical Stock Co. and Xugong Science & Technology Co. Weiyuan Bio-Chemical stock gained 281 percent in the past year, while Xugong -- a construction machinery maker in which U.S. buyout firm Carlyle Group bought a minority stake -- has risen 292 percent.

China "is another one of these classic hot and speculative markets that will end in tears," said Hugh Young, who oversees $35 billion as managing director at Aberdeen Asset Management Asia Ltd. in Singapore.