This paper established an evaluation index system of industrial competitiveness and examined the industrial competitiveness of 286 cities by using principal component analysis. We also studied the level of industrial competitiveness and the characteristics of spatial patterns in eight economic regions of China. Bringing agglomeration and external linkage which are the spatial elements into Cobb-Douglas production function, this paper analyzed the contribution degrees of technology, capital, labor and spatial elements at different levels of industrial development. The results are shown as follows. (1) The development level of industrial competitiveness in eastern coastal economic region is the highest among the eight regions, followed by south coastal economic region, north coastal economic region, northeast economic region, middle Yangtze River economic region, middle Yellow River economic region, northwest economic region and southwest economic region. Each economic region has its own spatial characteristics. (2) It is feasible to bring space elements into the production function model, which confirms that spatial elements have an important effect on the output though the contribution rates are different at different levels of industrial development. (3) With the advancement of industrial level, there are some trends as follows: the comprehensive technology first increases but then decreases; the labor force continues reducing, the capital increases steadily, and the space elements first decrease but then increase. Finally, the strong- and weak-level cities at the existing technical level have obvious increasing return to scale, while relatively strong- and relatively weak-level cities do not. The key point to promote the industrial development of the strong- and the weak-level cities is to strengthen the input of each element, yet for relatively strong- and relatively weak-level cities it is to change the structure of factor inputs and raise the contribution rates of capital and space elements.