Backgrounder: GEM board development

China's GEM board has faced lofty investors' expectations during its decade-long history. Now, there are positive signs to look forward to amid the upcoming review of seven Chinese companies' qualification for board.

At the end of 1998, the State Planning Commission proposed setting up the Growth Enterprise Market. The Shenzhen Stock Exchange submitted a feasible project report to the China Securities Regulatory Commission, the CSRC.

A working group for a high-tech board was established in Shenzhen in 2000. The State Council approved the application from the CSRC to set up a second-board market. Its name was later changed to the GEM board.

NASDAQ mythology broke in 2001 amid preparations for the GEM board. Hong Kong's GEM board also plummeted to 100 points, its lowest mark from its initial 1,200 points. Various problems and difficulties hampered the domestic GEM board. Until December 2006, CSRC Chairman Shang Fulin argued it was the right time to promote the GEM board.

The State Council gave the green light to the GEM board's management rules in August 2007. The China Securities Regulatory Commission formally issued a temporary management rule for GEM board in March. The rule took effect on May 1st.

The CSRC sought public opinion for the GEM board a month later. On July 26th, the CSRC accepted the first batch of applications from 105 companies applying for listing on the GEM board.

GEM's IPO Review Committee was formed on August 14th.

The China Securities Regulatory Commission says it will examine the first seven companies this Thursday. The businesses could be listed as early as October if they pass the examination. Until then, the GEM board hopes it can build on its ten-year history of going from strength to strength.