Abstract: Rational allocation of capital is very important for China to maintain an appropriate growth rate on the premise of ensuring economic quality. Based on a growth model with construction capital and equipment capital, this paper first makes a theoretical analysis of the relationship between economic growth rate and the ratio of construction capital to equipment capital. The results show that the more the ratio of construction capital to equipment capital deviates from the steady state, the higher the economic growth rate. On the left (right) side of the steady state, the economic growth rate is negatively (positively) correlated with the ratio of construction capital to equipment capital. Secondly, based on the provincial panel data from 2008 to 2017, this paper empirically examines the impact of the two capital ratios on China's economic growth. The results show that there is a negative correlation between China's economic growth rate and the ratio of construction capital to equipment capital. The deeper empirical analysis results show that because the ratio of construction capital to equipment capital increases, embodied technological progress rate in equipment capital decreases, which reduces the economic growth rate. Therefore, in order to make our economy grow continuously with high quality, we must reduce the ratio of construction capital to equipment capital. Based on the above conclusions, this paper puts forward corresponding policy recommendations.

Key words: the ratio of construction capital to equipment capital, the rate of capital-based technological progress, high-quality sustained growth