Using a sample of 285 Chinese Stateowned Enterprises (SOEs) that went public between 1997 and 2000, we study 312 postIPO merger and acquisition (M&A) cases to identify the root and the effects of relative M&A of Chinese listed companies and find that the mode of restructuring is the root of the problem. A research on the effects of relative M&A reveals that M&A in China has created value for shareholders as a whole, but this wealtheffect only exists in nonrelative transaction samples while relative M&A really could not add shareholder value. Empirical studies also indicate that in completely restructured SOEs, the nonrelative M&A have more abnormal returns than relative M&A.