BEIJING, Jan. 24 -- A total of 266 small and medium-sized companies (SMEs) started to be traded on the New Third Board on Friday, marking a considerable expansion for China's over-the-counter (OTC) market after the board was officially established one year ago.

The move, bringing the number of companies listed on the New Third Board to 621, represents China's efforts to encourage the development of SMEs against the current economic downward pressure.

The New Third Board, or National Equities Exchange and Quotation (NEEQ) system, serves as a national share transfer system for SMEs to transfer shares and raise funds.

Of all the debuting companies, which come from 28 provinces across the country, over 75 percent are engaged in innovative high-tech sectors, covering high-end manufacturing, information transmission, software, research and development, technological solutions and cultural services.

Twenty-three percent of the companies have capital stock between 5 million yuan (819,202 U.S. dollars) and 10 million yuan, while enterprises with 10 million to 20 million yuan take up 24 percent.

Companies with capital stock of 20 million yuan to 50 million yuan and of above 50 million yuan account for 34 percent and 19 percent, respectively, of the total.

Half of the enterprises posted revenue of over 50 million yuan in 2013 and a quarter reported 100-million-yuan revenue with net profits surpassing 10 million yuan.

Confronted with a potential slowdown in economic growth, widespread industrial overcapacity and weakening investment increases, China's economy is increasingly reliant on SMEs to generate growth.

Currently, such enterprises contribute 50 percent of national tax revenue, 60 percent of GDP, 80 percent of employment and 74 percent of technological innovation, the China Securities Journal reported on Friday.

However, SMEs in China still struggle with financing, regardless of whether they are trying direct or indirect ways of raising money, and are encumbered by intrinsic factors such as high risks for start-ups, lack of information and an opaque financial condition.

Prompted by the situation, the New Third Board was initiated in 2006 as an experimental platform to facilitate financing for China's non-listed small and promising high-tech enterprises in Beijing's Zhongguancun Science Park. Companies nationwide are now allowed to file applications.

The present system was officially established on Jan. 16, 2013 after years of trials in cities including Shanghai, Wuhan and Tianjin.

It complements the existing main board, the SME board and the ChiNext board, being seen as an easier financing channel with low costs, simple listing procedures and a short application period for start-up firms unqualified to be listed on major exchanges.

The State Council, China's Cabinet, released policy measures in June 2013 to support adjustment and upgrading of the country's economic structure, putting great emphasis on the OTC market in a bid to set up a multi-layered capital market.

Data from Straight Flush, a securities information service provider, showed that 355 enterprises listed on the New Third Board completed 60 issuance projects in 2013, raising over one billion yuan and with aggregate market value surging 64.55 percent year on year.

Xie Geng, general manager of the NEEQ, revealed that the new transaction platform for the board is scheduled to begin operating in May while a system for market makers could also be expected in August.

Yang Xiaojia, chairman of the board of the NEEQ, promised to expand cooperation with commercial banks and other financial institutes and build a connecting mechanism for the Third Board and other exchanges markets as well as regional markets.

A guideline for supervision over mergers and acquisitions of non-listed companies is being drafted and will be released as soon as perfected, said the China Securities Regulatory Commission on Thursday via its account with Sina Weibo, the Twitter-like microblogging service.