Berkshire's Buffett says China is too hot to buy

By Kirby Chien

DALIAN, China (Reuters) - Berkshire Hathaway Inc's Warren Buffett said on Wednesday he is scouring the world for big businesses, but is doubtful about finding a good buy in China because the market is too hot.

Hong Kong-listed shares in mainland companies .HSCE have risen 89 percent so far this year, while the main Shanghai index .SSEC has surged more than two-fold in 2007 and has jumped five-fold since the start of last year.

Buffett, speaking to reporters at the opening of a factory owned by an Israeli company he controls, had been asked about Berkshire's investment in PetroChina Co Ltd (0857.HK) (PTR.N), the country's largest oil and gas producer.

Buffett said last week that Berkshire (BRKa.N) (BRKb.N) had sold its entire stake in PetroChina, netting a huge profit for the insurance and investment company.

"It was a very easy decision to buy PetroChina. It was one-third of what it was worth, maybe a quarter. I doubt in the present market I would find something like that. The market has been too hot. I will keep looking," he said.

Berkshire at one point had a stake of 11 percent in PetroChina. The shares were worth $3.31 billion at the end of 2006, well above the $488 million that Berkshire paid for them, according to Berkshire's latest annual report.

Buffett said he had written to PetroChina Chairman Jiang Jiemin on Tuesday, thanking him for the "terrific" job he and his managers had done for shareholders.

Buffett said last week he had sold on valuation grounds, not because of criticism that PetroChina, through its government-owned parent China National Petroleum Corp, is too closely linked to Sudan.