Market structure in China's coal industry affects market performance. By analyzing data from 1994 to 2014, it was found that technology advancement and industry policies improve market concentration. However, market size and production scale have negative effects. Fixed capital acts as a barrier, initially for entry and later for exit. The government doesn't need to encourage mergers or expansions, but should focus on stricter market access, better exit compensation, and promoting innovation. These policies should be adjusted based on the economic cycle.