This paper evaluates the performance changes of 634 state-owned enterprises (SOEs) listed on China's two exchanges after share issue privatization (SIP) between 1994 and 1998. The study finds that SIP improved SOEs' earnings ability, real sales, and workers' productivity but did not significantly enhance profit returns or leverage. State ownership negatively impacts firm performance, while legal-person ownership positively affects it, indicating that legal persons behave differently from the state government. Foreign ownership does not consistently improve firm performance. The results suggest that partial privatization is effective, as state ownership negatively affects firm performance. However, the success of privatization is limited compared to other countries. The study also finds that legal-person ownership positively impacts firm profitability, indicating that legal persons behave differently from the central government. The findings have implications for further deepening of China's SOE reform, suggesting that state ownership should be reduced and more shares should be privatized to independent outside institutional investors. The study contributes to the privatization literature by examining the performance changes of SOEs after SIP and the relationship between ownership mix and firm performance. The results show that privatization has achieved some success but is limited when compared to other countries. The study also finds that foreign ownership does not consistently improve firm performance, possibly because foreign investors prefer direct investments or joint ventures with SOE partners. The results highlight the importance of ownership structure in determining firm performance and the need for further research on the effects of privatization on SOEs.This paper evaluates the performance changes of 634 state-owned enterprises (SOEs) listed on China's two exchanges after share issue privatization (SIP) between 1994 and 1998. The study finds that SIP improved SOEs' earnings ability, real sales, and workers' productivity but did not significantly enhance profit returns or leverage. State ownership negatively impacts firm performance, while legal-person ownership positively affects it, indicating that legal persons behave differently from the state government. Foreign ownership does not consistently improve firm performance. The results suggest that partial privatization is effective, as state ownership negatively affects firm performance. However, the success of privatization is limited compared to other countries. The study also finds that legal-person ownership positively impacts firm profitability, indicating that legal persons behave differently from the central government. The findings have implications for further deepening of China's SOE reform, suggesting that state ownership should be reduced and more shares should be privatized to independent outside institutional investors. The study contributes to the privatization literature by examining the performance changes of SOEs after SIP and the relationship between ownership mix and firm performance. The results show that privatization has achieved some success but is limited when compared to other countries. The study also finds that foreign ownership does not consistently improve firm performance, possibly because foreign investors prefer direct investments or joint ventures with SOE partners. The results highlight the importance of ownership structure in determining firm performance and the need for further research on the effects of privatization on SOEs.