This paper evaluates the performance changes of 634 state-owned enterprises (SOEs) listed on China's two exchanges following share issue privatization (SIP) from 1994 to 1998. The study finds that SIP effectively improved SOEs' earnings ability, real sales, and workers' productivity but did not significantly enhance profit returns or leverage. State ownership was found to have a negative impact on firm performance, while legal-person ownership, which consists of shares held by other SOEs, had a positive impact. Surprisingly, foreign ownership did not consistently show strong positive impacts on firm performance. The results suggest that partial privatization, where the state retains a substantial portion of ownership, may be more effective than complete privatization. The study also highlights the need for further reducing state ownership in privatized SOEs to enhance their performance.This paper evaluates the performance changes of 634 state-owned enterprises (SOEs) listed on China's two exchanges following share issue privatization (SIP) from 1994 to 1998. The study finds that SIP effectively improved SOEs' earnings ability, real sales, and workers' productivity but did not significantly enhance profit returns or leverage. State ownership was found to have a negative impact on firm performance, while legal-person ownership, which consists of shares held by other SOEs, had a positive impact. Surprisingly, foreign ownership did not consistently show strong positive impacts on firm performance. The results suggest that partial privatization, where the state retains a substantial portion of ownership, may be more effective than complete privatization. The study also highlights the need for further reducing state ownership in privatized SOEs to enhance their performance.