China's Third Board,set up as an over-the-counter stock trading system in Beijing's hi-tech area of Zhongguancun in 2006,underwent a major upgrading in 2013 with a national share transfer system put in place. This has allowed the Third Board to make rapid strides in its development. Since this breakthrough development,the number of traded companies has doubled and new record highs have been reached in market capitalization and the total number of outstanding shares. The number of new share issues and turnover all rose sharply and the price to earnings ratio continued to climb. Market liquidity improved and the investment structure of the traded companies has made substantial gains.

But there are still numerous shortcomings to the market - such as still lagging turnover compared to the other markets - and a number of reforms are needed to boost its role in helping raise funds for smaller companies.

As of the end of 2015,there were 5,129 companies traded on China's Third Board,14 times the tally of 2013 and three times the 2014 total. (At the time China Forex went to print,there were no full-year statistics for 2016) The Third Board market had about 300 billion shares on issue,surpassing the overall total on the more established Growth Enterprise Market (GEM),which along with its companion,the Small and Medium Enterprise market,comprises the second board. Both of these boards,based in Shenzhen,have been designed for companies that are somewhat larger than those on the Third Board. (The main or first boards are in Shanghai and Shenzhen and they are home to still bigger companies and those with a longer operating track record).

On the Third Board,the average number of outstanding shares of the traded enterprises is relatively small at 5,770 shares,only 15% of GEM and 10% of the SME market. At the end of 2015,the overall market value of China's Third Board reached 2.5 trillion yuan,more than five times the level of 2014 and 44 times of that of 2013. But the 2015 level was still only 44% of GEM and 25% of the SME.