The New Third Board faces a host of challenges in becoming a more robust national system for SMEs to transfer shares and raise funds as the exchange gains in popularity.

The New Third Board began in 2006 as an experimental platform for non-listed small high-tech enterprises in Beijing's Zhongguancun Science Park. Now it hosts over 10 thousand small companies.

Director of Internet Association of Tsinghua University's Business School, Shu Cheng said, "About 10 thousand of all 50 million companies came to list on the New Third Board. This is a normal trend. The number should reach 20 to 30 thousand in the future."

90 percent of the companies that came to list on the board are small or medium sized. However, some of them say the new trading system is not as effective as expected when it comes to raising funds. Relatively few are allowed to buy and sell because of the minimum investor asset requirement and that limits liquidity on the board.

Shu said, "Many companies who listed have not thought it through their positions. If they cannot attract investors, a lot of them become zombie stocks where nobody trades."

New 3rd Board Director of Zhongguancun Listed Companies Association, Zheng Shufen said, "There are not a lot of stock holders, so there are not a lot of stocks available for sale. Another reason is that many companies only went IPO recently and a lot of stockholders are in a lock-in period, which forbids them to trade their stocks"

What made the liquidity situation tighter is that some 60 companies on the New Third Board are going back to trading by contracts, instead of through the market maker system that's been in place since 2014.