The purpose of this study is to develop an economic growth model with endogenous technological change. The model is especially appropriate for the present Chinese economy in which the role of knowledge in economic growth is becoming more important. We are mainly concerned with long-run economic growth. The system consists of dynamic interactions between (material) capital and knowledge (human capital). The conditions for the existence of a unique equilibrium and stability are investigated. The effects of changes in the political parameters on economic growth are examined.