The low efficiency of state-owned enterprises (SOEs) is widely accepted by academics.However,the accounting literature shows that non-SOEs are more likely to engage in eings management,which artificially boosts their financial performance.This suggests that the higher financial performance in non-SOEs may be merely cosmetic.This study compares the real financial performance between SOEs and non-SOEs,while the real performance is obtained by estimating the level of eings management and removing it from the reported financial performance.The result shows that there is no significant difference in real performance between SOEs and non-SOEs.This study sheds new light on the debate over the efficiency of SOEs and the relationship between ownership structure and financial performance.