With China tops global patent filings, Chinese innovation capability is coming into the picture. However, is this real innovation capability of China? This paper calculates and analyzes the Annual Growth Rate of R&D inputs and outputs from Scientific Research and Development Institute (SRDI) in PR. China, covering the time period of 1999-2010. pointing out the existing questions and reasons. And then assesses the R&D efficiency of SRDI by using Data Envelopment Analysis (DEA) method. The main contribution of this paper is that the activities of SRDI are analyzed from different perspectives and concludes that the total innovation capability of SRDI in China is exciting but the quality of outputs needs to be improved further in the future.