This study investigates the relationship between firm ownership structure and performance for a comprehensive sample of Chinese listed firms for the period from 2000 to 2004. We find a convex relationship between state ownership and firm value, i.e. ownership by the state is beneficial at levels above approximately 35% but negative effects on value are observed at lower levels. The main theme of the paper relates to analysis of effects of private block shareholders on value. We examine this issue both in an OLS and 2SLS equation framework which takes account of potential endogeneities in ownership-performance relationship. We find evidence that the presence of large private shareholders at firms with no significant state holdings is detrimental to the performance of these firms.