A real model of transitional growth and competitiveness in China

► We present a stylized real neoclassical growth model of the Chinese economy. ► It explains that domestic production is highly competitive, and domestic savings and FDI are high. ► It includes low production wages sustained by substantial rural labor driving internal migration. ► It includes domestic capital distinct from importable capital, and complementary with it in production. ► It shows that real phenomena are important in explaining recent Chinese history.