BEIJING, July 21 -- The planned over-the-counter (OTC) market and the Beijing-Tianjin express railway are upgrading the importance of Tianjin and spurring the economic integration of the cities.

The 120 km Beijing-Tianjin express railway was completed on June 30, making it possible for the high-speed train to go on track as scheduled for the 2008 Olympics. It's the first train in the mainland that reaches 300kmh and will shorten travel time between the two cities from about two hours to 30 minutes. (Xinhua Photo) Photo Gallery>>>

    The State Council released "Suggestions on Promoting Development and Opening-up of Tianjin Binhai Development Zone" in June 2006, in hopes of turning Tianjin into a new engine similar to the Shenzhen Special Economic Zone and Shanghai Pudong New Area to boost the economy, especially in the Bohai ring.

    To realize the goal, the central government and Tianjin municipal government have provided policy and money support to improve its financial system and infrastructure.

    And Airbus has invested 7 billion euros to build A320 aircraft final assembly lines in the Binhai Development Zone and plans to produce 300 A320 aircraft by the year 2016 to meet the needs of the Chinese market.

    The OTC market

    Tianjin is now planning to establish an OTC market in the Binhai Development Zone according to "Overall Planning of Coordinated Reforms in Binhai Development Zone of Tianjin" approved by the State Council during the Chinese People's Political Consultative Conference (CPPCC) and National People's Congress (NPC) this year.

    Although a detailed schedule has not been released so far, measures are being taken actively.

    OTC market refers to stock transactions outside the main stock exchange boards. It is mainly open to small- and medium-sized enterprises unqualified for listings on the main board.

    The flow of stock ownership is not strictly restricted by assets scale or the profit-making ability of the enterprise in the OTC market. It usually requires comparatively lower listing fees and easier procedures.

    For small- and medium-sized enterprises, the OTC market provides a more convenient financing channel.

    "A large number of domestic enterprises have raised a considerable amount of money in the OTCBB (Over the Counter Bulletin Board, a form of OTC market) market in the United States," says He Xiaofeng, a member of the Research Center on Finance and Industry of Peking University.

    "Shenzhen Bak Battery Co Ltd got listed in the US OTCBB market in January, 2005 and altogether has raised 77 million U.S. dollars; Fushi International (Dalian) Bimetallic Cable Co Ltd, 12 million dollars; Shanxi Puda Co Ltd, 10 million dollars; and Far-east Energy, 10 million dollars," says He.

    As a component to improve Chinese capital market, the proposed OTC market would meet the various needs for capital at different levels. For example, nearly 1,000 venture investment funds have been registered in Tianjin. The establishment of an OTC market will provide them with a new opportunity to find investment channels.