Taking Chinese listed companies as samples, the impact of the change of large shareholder ownership on corporate performance was examined. Results indicated that after government-directly-controlled companies transformed into government-indirectly-controlled ones, their performance were not improved and obvious accounting earnings management happened.  A further analysis showed that the short-term performance of firm was improved if executive turnover happened in the firm and the companies facing keen market competition improved their profits greatly. The findings gave empirical evidence to state-shareholding decentralization and the diversity of shareholder ownership. The role of some measures, including introducing "market-oriented" shareholders into listed companies, improving the appointment mechanism of executives in companies and sharpening market competition, was also discussed.