This paper evaluates the index of China’s economic development quality by using principal component analysis based on provincial panel data of 30 provinces and municipalities of China during 1997-2014, and uses the spatial panel Doberman model to make an empirical analysis on the impact of industrial upgrading on the quality of China’s economic growth. The research results show that the quality of China’s economic growth is on the rise in general since 1997, however, the growth rates in different provinces are different. Specifically, the economic benefits of Qinghai, Guangdong and Jiangsu provinces are remarkable, and the economic quality of Guangxi, Fujian and Hebei provinces is poor, the economic quality needs to be improved. From Differential generalized moment estimation regression results, we know that industrial upgrading, human capital improvement and technological innovation are the key factors to improve the quality of economic growth, which indicates that industrial upgrading, human capital and technological innovation are the key factors to improve the quality of economic growth. While the variable system coefficient is negative and through the 10% significance level, which indicate that institutional changes curb the improvement of economic growth quality in the short term. There is positive spillover effect of explanatory variables such as industrial upgrading, human capital and innovation on economic growth quality index in adjacent spatial unit, furthermore, economic growth quality rises 0.256 percent when industrial upgrading degree rises 1 percent, which show that industrial upgrading improves economic growth quality.