This paper analyzes the effect of government R&D fundings and enterprise R&D inputs on China's innovation efficiency and optimal intensity range of government R&D fundings and enterprise R&D inputs by means of the logarithm of the stochastic frontier model and threshold regression model using the panel data of China from 2003 to 2012. The test results show that the government R&D fundings for innovation efficiency is negative, that is there is a "government failure". However, enterprise R&D inputs can promote innovation efficiency, "market failure" is less. At present, the optimal intensity range of government R&D fundings is 0.282 above, enterprise R&D inputs is from 0.688 to 0.775.