Last checked at 
* HSI -0.6 pct, H-shares -0.7 pct, CSI300 -0.7 pct
* China risks stoking inflation with more easing - PremierLi
* Chinese financials hit on private bank pilot report
* HSBC climbs after positive Q3 earnings
By Clement Tan
HONG KONG, Nov 5 (Reuters) - China shares tested theirlowest in a week on Tuesday, leading Hong Kong markets lower, asgrowth-sensitive counters were hit by hawkish comments fromPremier Li Keqiang ahead of a key Communist Party policy meetingthis weekend.
The financial sector was further roiled by fears that morecompetition will hurt margins after the official ChinaSecurities Journal reported a private banking pilot may startearly next year.
By 0530 GMT, the CSI300 of the leading Shanghaiand Shenzhen A-shares was down 0.7 percent, while the ShanghaiComposite Index shed 0.4 percent. Earlier, both onshoreindexes had tested their lowest in five sessions andunderperformed most Asian markets.
The Hang Seng Index sank 0.6 percent to 23,047.8points, while the China Enterprises Index of the topChinese listings in Hong Kong slid 0.7 percent, once againstruggling at its 200-day moving average.
"His comments are different from what people were expecting.He definitely sounds more hawkish now and this is a shift fromwhat he said earlier this year about bottom line growth," saidHong Hao, chief strategist at Bank of CommunicationsInternational.
But losses did not come in exceptionally heavy volumes inboth markets, suggesting there was no panic selling.
In comments made in an Oct. 21 speech that was onlypublished in full late on Monday, Li said China needs 7.2percent economic growth to generate 10 million jobs, but thatmore stimulus will be more difficult since printing more moneywill cause inflation.
He added that reform was important and that short-termfiscal or monetary stimulus was not sustainable.
Chinese financials were the biggest drags on benchmarkindexes onshore and offshore. Mid-sized lenders were the biggerlosers, with Ping An Bank sinking 1.3 percent inShenzhen and Industrial Bank tanking 3.2 percent inShanghai.
China Construction Bank (CCB) was amongthe worst performing of the "Big Four" Chinese banks, sliding1.2 percent in Hong Kong and 0.5 percent in Shanghai.
The Chinese property sector slid again after the 21stCentury Business Herald newspaper reported that the Beijing citygovernment may not allow developers to raise home prices beforethe end of this year.
China Vanke fell 1 percent in Shenzhen, whilePoly Real Estate sank 1.8 percent in Shanghai andChina Overseas Land shed 1.9 percent in Hong Kong.
The sector has been hit by policy uncertainty in recentsessions as rising home prices have raised expectations that thecentral government could move to increase curbs on the propertymarket.
But there were gains for HSBC Holdings ,whose Hong Kong shares climbed 1.5 percent after Europe'slargest bank posted a better-than-expected 10 percent rise inthird quarter profits.
Shares of Lenovo Group rose 1 percent afterBlackBerry abandoned its plan to sell itself. Chinesetechnology giant Lenovo had been exploring the possibility ofacquiring the telecom equipment company.
