Coal allocation in China is a seminal case of e-government in the political economy. The empirical phenomenon of market supporting e-government has not been systematically analysed. By developing and applying a digital governance model this article examines institutional change in a case of coal allocation reform in China. The case shows how the central state used e-government to get rid of planning overload. Coal allocation meetings were abolished in favour of an ecology of online market solutions. The findings suggest that further research on Chinese e-government would benefit from attention to the role of e-government in the political economy.