This study uses discretionary loan loss provisions to capture bank managers' propensity for earnings management. This purpose is to investigate the relationship between earnings management and corporate governance in Chinese banking industry. The sample consists of 38 banks, spanning the period from 2007 to 2013. This research finds that banks in China set aside less (more) loan loss provisions to increase (decrease) earnings. Sound banks would like to set aside more loan loss provisions. Empirical results also indicate that board size and large-block shareholders could not decrease earnings management, especially for the listed banks and the group with lower profitability. Taken as a whole, corporate government in Chinese banking industry did not work, even foreign strategic shareholders had a positive monitoring effect during the period of financial crisis. Both groups of higher profitability and negative earnings management show that the higher level of state ownership sets aside more loan loss provisions, which implies the higher propensity of regulatory compliance.