After ten years of deliberations, China's dream to create a Nasdaq-style growth enterprise board was to come true May this year.

In late March, the China Securities Regulatory Commission (CSRC), the country's securities watchdog, published on its website provisional regulations for listings on the board, which would take effect on May 1.

"It is no exaggeration to compare the delivery of the growth enterprise board (GEB) to the forging of a sword over a ten year period," said Liu Jipeng, a professor at China University of Political Science and Law who followed the board's development for several years.

He told the EO that some regulatory agencies had considered launching the board last May, but decided not to propose it to the State Council since policymakers were at the time focused on stabilizing China's stock market.

It was but one of many setbacks on the board's long road of development.

In 1997, before the Hong Kong Stock Exchange launched its growth enterprise board, it held a one-day presentation about the board in Beijing to attract mainland firms to list there.

This was the first time that the concept had been introduced to Chinese firms. Liu Jipeng recalled that over 80 domestic companies attended the presentation, nearly triple the amount invited.

Later, during the top legislative meet in 1998, China's National Democratic Construction Association, an advisory political party, put forward a motion to set up a growth enterprise board to develop China's venture capital industry. The topic had been under heated discussion ever since.

"At that time, the growth enterprise board aimed to promote the development of the knowledge-based economy, exemplified by high-tech firms," said one senior manager from Shanghai Stock Exchange.

Before 1998, global capital markets, including China, embraced a bull period that fueled the development of high-tech start-up firms around the country. Against this backdrop, the Shenzhen Stock Exchange prepared to launch a growth enterprise board.

However, with the outbreak of the Asian financial crisis in 1998 and the burst of the tech bubble in 2000, China's State Council, after soliciting opinion from the Hong Kong Stock exchange, decided to suspend the process of launching the board.

Meanwhile, as China plunged into a bear market in 2000, the domestic capital markets dried up, and cash-strapped, large state-owned firms feared that a new growth enterprise board would only draw investment away from them.

During Beijing's top legislative meet in 2003, Cheng Siwei, Lin Yifu and other prominent domestic economists vocally opposed creating the growth enterprise board. Cheng stressed the extra risk the board would bring to an already speculative market, while Lin said that high-tech industry had no core technology to build upon even if it had extra financing channels.

More recently, the financial crisis has created an impetus for China to make it easier for the private economy to raise funds. As most venture capital firms were private, private firms would benefit most from its establishment.

"This is the best channel for private capitals to raise funds," said Cai Yong, president of Guoyuan Securities, adding that private venture capital firms would undoubtedly see rapid growth thanks to the new board.

State-owned venture capitalists were also excited. "We have waited for this moment for quite a long time," said a board member of Shenzhen Capital Group, a state-owned venture capital firm. Over the past ten years, the firm has invested in over 200 projects, all of which aimed to be listed on the new board.

However, rules on underwriting initial public offerings would limit the amount of firms that could qualify to be listed in the near future.

Liu Jipeng estimated that the first batch of listings would number at least eight, with a total of some 150 firms likely to be listed by the end of 2009.