Based on the data of listed companies in China from 2007 to 2012, this paper studies the impact of product market competition and competitive position on managers’earnings management behavior, including accrual earnings management and real earnings management. The result shows that product market competition and competitive position of listed companies have important influence on managers’accrual earnings management and real activity earnings management in listed companies. Specifically, the lower the concentration degree of listed company, the more intense the competition in the product market, the higher the accrual earnings management and the real earnings management. The effect of competitive position (pricing power and market share) of listed companies in the industry is more complex, companies with strong pricing power are more inclined to use accrual earnings management to increase profit, while the companies taking higher shares in the industry are more inclined to use real activities earnings management to manipulate profits.