Based on the matched data of WIOD and Chinese microfirm, we study the impact of servitization of manufacturing on the misallocation of resources in cities and find the effective path to achieve the high-quality development of manufacturing in China. First of all, the result suggests that servitization of manufacturing can improve misallocation of resources. The positive effects of servitization in eastern cities are stronger than those in central and western cities. Second, the servitization of technology, finance, distribution and transportation have promotion effects on optimizing the allocation of resources. Among them, the promoting effect of the servitization of finance is larger than others. However, the effect of the servitization of telecommunication is insignificant. Third, the impact of servitization on allocation improvement is increased as the efficiency of administration enhances. Fourth, the development of high technology and market competition will help manufacturing service to improve the resource misallocation situation in eastern cities, but will aggravate the resource misallocation in central and western cities.