Based on the theory of industry organ ization,this paper analyzes the market structure of China' s coal in-dustry and how it is developed.It als o presents a goal model of China' s coal industry.This paper makes recom-mendations on setting up good market competition order,setting up and perfecting the regulation of entry,decreasing the barriers to exit,reforming the o rganizational structure of enterpr ise and accelerating technological progress.