Existing studies have failed to reach the consistent conclusion about the differences in performance between state-owned enterprises (SOEs) and non-SOEs. A sample of Chinese-listed firms from the period 2003–2011 is used in this study for fixed-effects panel data regression, providing up-to-date evidence related to the accounting and market performance of Chinese SOEs. The results enhance our understanding of the Chinese corporate governance mechanism, and offer cross-sectional implications for other emerging countries. We find that, in China, non-SOEs perform significantly better than SOEs. In addition, the Chinese SOEs have more complex agency problems, and the entrenchment effect seems to dominate the alignment effect for these firms. The findings also suggest that board characteristics including independent directors and CEO duality, are detrimental to the performance of the Chinese SOEs.