Sustainable forestry requires adopting more ecosystem-informed perspectives. Tree thinning improves forest productivity by encouraging the development of the understory, which in turn improves species diversity and nutrient cycling, thereby altering the ecophysiological environment of the stand. This study aimed to quantify tree growth, understory vegetation, and soil quality of 9- and 16-year-old Chinese fir (Cunninghamia lanceolata (Lamb.) Hook.) plantations in South China, 1–7 years after pre-commercial thinning. The quadratic mean diameter (QMD) and individual tree volume were greatly increased and compensated for the reduced stand yield in thinned stands. In 2011, the stand volume in unthinned and thinned stands were 276.33 and 226.46 and 251.30 and 243.64 m³ ha⁻¹, respectively, for young and middle stage. Therefore, we predicted that over time, the stand volume in thinned stands should exceed that in unthinned stands. The composition, diversity, and biomass of understory vegetation of the plantation monocultures significantly increased after thinning. The effects of thinning management on understory development were dynamic and apparent within 1–2 years post-thinning. Some light-demanding plant species such as Styrax faberi, Callicarpa formosana, Lophatherum gracile, and Gahnia tristis emerged in the shrub and herb layer and became dominant with the larger gaps in the canopy in thinned stands. The trigger effects of thinning management on understory and tree growth were more pronounced in the young stage. The beneficial effects on soil physical and chemical properties were measurable at later stages (7 years after thinning). The strong positive relationship between understory biomass and volume increment (at the tree and stand levels) indicated that understory improvement after thinning did not restrict productivity within Chinese fir stands but rather, benefited soil water content and nutrient status and promoted tree growth.