The Shih Tzu breed has a double coat of hair, a shorter inner layer and a long outer layer, though it should be noted that due to poor breeding practices, a Shih Tzu may have a very thin inner layer or hardly one at all.
Newborn puppies are born with just the inner layer. As they mature, the primary longer hairs will grow in, in the already-present hair follicles.
It is for this reason that Shih Tzu puppies have finer, thinner, and shorter coats than their adult counterparts.
When one refers to Shih Tzu puppy shedding, this actually is the transitional phase of puppy to adult coat. While some hairs will indeed shed off, this is a time of increased hair volume.
This change-over is most prominent starting at 4 months old and by the time a Shih Tzu is 9 to 12 months old, he will have his adult coat. Do keep in mind that the coat will then continue to grow and renew as described earlier via year-round, gradual shedding.