Factor　allocation　has　an　important　impact　on　production　efficiency,　and　this　study　discusses　factor　misallocation　and　proposes　an　optimized　method　that　could　improve　efficiency　and　reduce　factor　inputs.　Under　a　multi-industry　competitive　equilibrium　model,　by　introducing　distortion　tax　that　represents　frictions　on　factor　inputs　(capital,　labor,　energy,　and　other　intermediate　consumption),　we　define　factor　price　distortion　indexes　to　measure　factor　misallocation　and　set　the　standardized　comprehensive　distortion　index　at　the　optimal　value　of　one　to　obtain　optimized　allocation　of　each　factor.　Using　actual　and　optimized　inputs,　we　compute　input-oriented　efficiencies　separately　by　employing　a　slack-based　measurement　data　envelopment　analysis　(SBM-DEA).　The　superiority　of　the　new　allocation　method　is　tested　by　comparing　changes　in　efficiency　and　input　redundancy　before　and　after　optimization.　An　empirical　test　based　on　China＇s　manufacturing　sector　during　1999-2016　shows　that,　under　the　optimized　reallocation,　on　average,　efficiency　is　improved　by　43.40%,　capital,　labor,　energy,　and　other　intermediate　consumption　are　reduced　by　18.06%,　16.34%,　30.91%,　and　31.24%,　respectively,　and　the　total　carbon　emission　is　reduced　by　55.22%　from　2000　to　2016.　Our　results　imply　that　factor　misallocation　causes　losses　in　efficiency　and　excessive　input　of　factors,　and　factor　allocation　needs　to　be　further　optimized　for　sustainable　development.