One sign of a bubble is when investors assign illogical values to companies that might have fundamental problems.

This happened with many Nasdaq stocks in 2000. As one example, companies that sold airline tickets over the Internet were valued higher than all of the airlines themselves.

We may be seeing signs of a bubble forming now in China. According to Fortune magazine, the two largest companies in China have greater stock market capitalizations than the two largest companies in the United States.

Investors are betting that PetroChina is the most valuable company in the world, with a total market cap of $338 billion. The most valuable American company is ExxonMobil, which is worth about $320 billion according to stock investors.

China’s largest bank, ICBC, with a market cap of $232 billion, is more valuable than Microsoft. The software giant is the No. 2 company in the United States, valued at $211 billion.

Valuations in China are still far below the lofty levels seen in the Internet bubble of 2000, however.

At that time, Microsoft was No. 1 with a market cap of more than $600 billion. GE was worth over half a trillion dollars then. Today the conglomerate is worth less than 30 percent of that amount.

While PetroChina does have valuable oil reserves, the price of oil is down about 50 percent compared to last year. Also, ExxonMobil has about twice the level of proven reserves.

The case for investing in ICBC is even weaker. No one knows how many bad loans are on its books and the government tightly controls many business decisions.

The Chinese market may very well have peaked on the news that its largest companies were the most valuable in the world.