diff --git a/package.json b/package.json
index 0353b1a29..78bccd06e 100644
--- a/package.json
+++ b/package.json
@@ -41,7 +41,7 @@
     "rollup-plugin-terser": "^2.0.2",
     "rollup-plugin-typescript2": "^0.17.0",
     "ts-jest": "^23.10.0",
-    "typescript": "^3.1.3",
+    "typescript": "^3.5.0",
     "yorkie": "^2.0.0"
   }
 }
diff --git a/packages/observer/src/effect.ts b/packages/observer/src/effect.ts
index 819d7e6a3..ea136aed5 100644
--- a/packages/observer/src/effect.ts
+++ b/packages/observer/src/effect.ts
@@ -120,8 +120,8 @@ export function trigger(
     // never been tracked
     return
   }
-  const effects = new Set()
-  const computedRunners = new Set()
+  const effects: Set<ReactiveEffect> = new Set()
+  const computedRunners: Set<ReactiveEffect> = new Set()
   if (type === OperationTypes.CLEAR) {
     // collection being cleared, trigger all effects for target
     depsMap.forEach(dep => {
diff --git a/packages/runtime-core/__tests__/createComponent.spec.ts b/packages/runtime-core/__tests__/createComponent.spec.ts
new file mode 100644
index 000000000..9821a2850
--- /dev/null
+++ b/packages/runtime-core/__tests__/createComponent.spec.ts
@@ -0,0 +1,36 @@
+import { createComponent } from '../src/component'
+import { value } from '@vue/observer'
+
+test('createComponent type inference', () => {
+  const MyComponent = createComponent({
+    props: {
+      a: Number,
+      b: {
+        type: String
+      }
+    },
+    setup(props) {
+      props.a * 2
+      props.b.slice()
+      return {
+        c: value(1),
+        d: {
+          e: value('hi')
+        }
+      }
+    },
+    render({ state, props }) {
+      state.c * 2
+      state.d.e.slice()
+      props.a * 2
+      props.b.slice()
+      this.a * 2
+      this.b.slice()
+      this.c * 2
+      this.d.e.slice()
+    }
+  })
+  MyComponent // avoid unused
+  // rename this file to .tsx to test TSX props inference
+  // ;(<MyComponent a={1} b="foo"/>)
+})
diff --git a/packages/runtime-core/__tests__/inheritance.spec.ts b/packages/runtime-core/__tests__/inheritance.spec.ts
deleted file mode 100644
index 61ca8058f..000000000
--- a/packages/runtime-core/__tests__/inheritance.spec.ts
+++ /dev/null
@@ -1,291 +0,0 @@
-import {
-  Component,
-  observable,
-  h,
-  nextTick,
-  KeepAlive,
-  ComponentPropsOptions,
-  ComponentWatchOptions
-} from '@vue/runtime-core'
-import { createInstance, renderInstance } from '@vue/runtime-test'
-
-describe('class inheritance', () => {
-  it('should merge data', () => {
-    class Base extends Component {
-      foo = 1
-      data() {
-        return {
-          bar: 2
-        }
-      }
-    }
-
-    class Child extends Base {
-      foo: number
-      bar: number
-      baz: number
-      qux: number = 4
-
-      data(): any {
-        return {
-          baz: 3
-        }
-      }
-    }
-
-    const child = createInstance(Child)
-
-    expect(child.foo).toBe(1)
-    expect(child.bar).toBe(2)
-    expect(child.baz).toBe(3)
-    expect(child.qux).toBe(4)
-  })
-
-  it('should merge props', () => {
-    class Base extends Component {
-      static props: ComponentPropsOptions = {
-        foo: Number
-      }
-    }
-
-    class Child extends Base {
-      foo: number
-      bar: number
-      $props: { foo: number; bar: number }
-      static props: ComponentPropsOptions = {
-        bar: Number
-      }
-    }
-
-    const child = createInstance(Child, {
-      foo: 1,
-      bar: 2
-    })
-
-    expect(child.foo).toBe(1)
-    expect(child.bar).toBe(2)
-    expect(child.$props.foo).toBe(1)
-    expect(child.$props.bar).toBe(2)
-  })
-
-  it('should merge lifecycle hooks', async () => {
-    const calls: string[] = []
-    const state = observable({ ok: true })
-
-    class Base extends Component {
-      beforeCreate() {
-        calls.push('base beforeCreate')
-      }
-      created() {
-        calls.push('base created')
-      }
-      beforeMount() {
-        calls.push('base beforeMount')
-      }
-      mounted() {
-        calls.push('base mounted')
-      }
-      beforeUpdate() {
-        calls.push('base beforeUpdate')
-      }
-      updated() {
-        calls.push('base updated')
-      }
-      beforeUnmount() {
-        calls.push('base beforeUnmount')
-      }
-      unmounted() {
-        calls.push('base unmounted')
-      }
-    }
-
-    class Child extends Base {
-      beforeCreate() {
-        calls.push('child beforeCreate')
-      }
-      created() {
-        calls.push('child created')
-      }
-      beforeMount() {
-        calls.push('child beforeMount')
-      }
-      mounted() {
-        calls.push('child mounted')
-      }
-      beforeUpdate() {
-        calls.push('child beforeUpdate')
-      }
-      updated() {
-        calls.push('child updated')
-      }
-      beforeUnmount() {
-        calls.push('child beforeUnmount')
-      }
-      unmounted() {
-        calls.push('child unmounted')
-      }
-      render() {
-        return state.ok ? 'foo' : 'bar'
-      }
-    }
-
-    class Container extends Component {
-      show = true
-      render() {
-        return this.show ? h(Child) : null
-      }
-    }
-
-    const container = await renderInstance(Container)
-    expect(calls).toEqual([
-      'base beforeCreate',
-      'child beforeCreate',
-      'base created',
-      'child created',
-      'base beforeMount',
-      'child beforeMount',
-      'base mounted',
-      'child mounted'
-    ])
-
-    calls.length = 0
-    state.ok = false
-    await nextTick()
-    expect(calls).toEqual([
-      'base beforeUpdate',
-      'child beforeUpdate',
-      'base updated',
-      'child updated'
-    ])
-
-    calls.length = 0
-    container.show = false
-    await nextTick()
-    expect(calls).toEqual([
-      'base beforeUnmount',
-      'child beforeUnmount',
-      'base unmounted',
-      'child unmounted'
-    ])
-  })
-
-  it('should merge lifecycle hooks (activated/deactivated)', async () => {
-    const calls: string[] = []
-
-    class Base extends Component {
-      activated() {
-        calls.push('base activated')
-      }
-      deactivated() {
-        calls.push('base deactivated')
-      }
-    }
-
-    class Child extends Base {
-      activated() {
-        calls.push('child activated')
-      }
-      deactivated() {
-        calls.push('child deactivated')
-      }
-      render() {
-        return 'foo'
-      }
-    }
-
-    class Container extends Component {
-      ok = true
-      render() {
-        return h(KeepAlive, this.ok ? h(Child) : null)
-      }
-    }
-
-    const container = await renderInstance(Container)
-    expect(container.$el.text).toBe('foo')
-
-    container.ok = false
-    await nextTick()
-    expect(container.$el.text).toBe('')
-    expect(calls).toEqual(['base deactivated', 'child deactivated'])
-
-    calls.length = 0
-    container.ok = true
-    await nextTick()
-    expect(container.$el.text).toBe('foo')
-    expect(calls).toEqual(['base activated', 'child activated'])
-  })
-
-  it('should merge watchers', async () => {
-    const fooCallback = jest.fn()
-    const barCallback = jest.fn()
-
-    class Base extends Component {
-      static watch: ComponentWatchOptions = {
-        foo: fooCallback
-      }
-    }
-
-    class Child extends Base {
-      foo = 1
-      bar = 2
-      static watch: ComponentWatchOptions = {
-        bar: barCallback
-      }
-    }
-
-    const child = createInstance(Child)
-    child.foo = 2
-    await nextTick()
-    expect(fooCallback).toHaveBeenCalledWith(2, 1)
-    child.bar = 3
-    await nextTick()
-    expect(barCallback).toHaveBeenCalledWith(3, 2)
-  })
-
-  it('should inherit methods', () => {
-    const fooCallback = jest.fn()
-    const barCallback = jest.fn()
-
-    class Base extends Component {
-      foo() {
-        fooCallback()
-      }
-    }
-
-    class Child extends Base {
-      bar() {
-        barCallback()
-      }
-    }
-
-    const child = createInstance(Child)
-    child.foo()
-    child.bar()
-    expect(fooCallback).toHaveBeenCalled()
-    expect(barCallback).toHaveBeenCalled()
-  })
-
-  it('should inherit computed properties', () => {
-    class Base extends Component {
-      a = 1
-      get foo() {
-        return this.a + 1
-      }
-    }
-
-    class Child extends Base {
-      b = 1
-      get bar() {
-        return this.b + this.foo + 1
-      }
-    }
-
-    const child = createInstance(Child)
-    expect(child.foo).toBe(2)
-    expect(child.bar).toBe(4)
-
-    child.a = 2
-    expect(child.foo).toBe(3)
-    expect(child.bar).toBe(5)
-  })
-})
diff --git a/packages/runtime-core/__tests__/memoize.spec.ts b/packages/runtime-core/__tests__/memoize.spec.ts
deleted file mode 100644
index bc6d5cbd9..000000000
--- a/packages/runtime-core/__tests__/memoize.spec.ts
+++ /dev/null
@@ -1,54 +0,0 @@
-import { h, Component, memoize, nextTick } from '../src'
-import { renderInstance, serialize } from '@vue/runtime-test'
-
-describe('memoize', () => {
-  it('should work', async () => {
-    class App extends Component {
-      count = 1
-      render() {
-        return h('div', [
-          this.count,
-          this.count % 2
-            ? memoize(() => h('div', `A` + this.count), this, 0)
-            : null,
-          memoize(() => h('div', `B` + this.count), this, 1)
-        ])
-      }
-    }
-
-    const app = await renderInstance(App)
-    expect(serialize(app.$el)).toBe(`<div>1<div>A1</div><div>B1</div></div>`)
-
-    app.count++
-    await nextTick()
-    expect(serialize(app.$el)).toBe(`<div>2<div>B1</div></div>`)
-
-    app.count++
-    await nextTick()
-    // test remounting a memoized tree
-    expect(serialize(app.$el)).toBe(`<div>3<div>A1</div><div>B1</div></div>`)
-  })
-
-  it('should invalidate based on keys', async () => {
-    class App extends Component {
-      foo = 1
-      bar = 1
-      render() {
-        return memoize(() => h('div', this.foo + this.bar), this, 0, [this.bar])
-      }
-    }
-
-    const app = await renderInstance(App)
-    expect(serialize(app.$el)).toBe(`<div>2</div>`)
-
-    app.foo++
-    await nextTick()
-    // should not update
-    expect(serialize(app.$el)).toBe(`<div>2</div>`)
-
-    app.bar++
-    await nextTick()
-    // should update now
-    expect(serialize(app.$el)).toBe(`<div>4</div>`)
-  })
-})
diff --git a/packages/runtime-core/__tests__/mixins.spec.ts b/packages/runtime-core/__tests__/mixins.spec.ts
deleted file mode 100644
index 0c0d48246..000000000
--- a/packages/runtime-core/__tests__/mixins.spec.ts
+++ /dev/null
@@ -1,294 +0,0 @@
-import { Component, ComponentClass, mixins } from '@vue/runtime-core'
-import { createInstance } from '@vue/runtime-test'
-import { prop } from '@vue/decorators'
-
-const calls: string[] = []
-
-beforeEach(() => {
-  calls.length = 0
-})
-
-class ClassMixinA extends Component<{ p1: string }, { d11: number }> {
-  // props
-  @prop
-  p1: string
-  // data
-  d1 = 1
-  data() {
-    return {
-      d11: 2
-    }
-  }
-
-  // computed
-  get c1() {
-    return this.d1 + this.$data.d11
-  }
-
-  // lifecycle
-  created() {
-    calls.push('created from mixin A')
-  }
-
-  // methods
-  foo() {
-    return this.d1
-  }
-}
-
-class ClassMixinB extends Component<{ p2: string }, { d21: number }> {
-  // props
-  static props = {
-    p2: String
-  }
-
-  // data
-  d2 = 1
-  data() {
-    return {
-      d21: 2
-    }
-  }
-
-  get c2() {
-    return this.d2 + this.$data.d21
-  }
-
-  // lifecycle
-  created() {
-    calls.push('created from mixin B')
-  }
-
-  // methods
-  bar() {
-    return this.d2
-  }
-}
-
-const ObjectMixinA = {
-  props: {
-    p1: String
-  },
-  data() {
-    return {
-      d1: 1,
-      d11: 2
-    }
-  },
-  computed: {
-    c1() {
-      return this.d1 + this.d11
-    }
-  },
-  created() {
-    calls.push('created from mixin A')
-  },
-  methods: {
-    foo() {
-      return this.d1
-    }
-  }
-}
-
-const ObjectMixinB = {
-  props: {
-    p2: String
-  },
-  data() {
-    return {
-      d2: 1,
-      d21: 2
-    }
-  },
-  computed: {
-    c2() {
-      return this.d2 + this.d21
-    }
-  },
-  created() {
-    calls.push('created from mixin B')
-  },
-  methods: {
-    bar() {
-      return this.d2
-    }
-  }
-}
-
-function assertMixins(Test: any) {
-  const instance = createInstance(Test, {
-    p1: '1',
-    p2: '2',
-    p3: '3'
-  }) as any
-
-  // data
-  expect(instance.d1).toBe(1)
-  expect(instance.d11).toBe(2)
-  expect(instance.d2).toBe(1)
-  expect(instance.d21).toBe(2)
-  expect(instance.d3).toBe(1)
-  expect(instance.d31).toBe(2)
-
-  // props
-  expect(instance.p1).toBe('1')
-  expect(instance.p2).toBe('2')
-  expect(instance.p3).toBe('3')
-  expect(instance.$props.p1).toBe('1')
-  expect(instance.$props.p2).toBe('2')
-  expect(instance.$props.p3).toBe('3')
-
-  // computed
-  expect(instance.c1).toBe(3)
-  expect(instance.c2).toBe(3)
-  expect(instance.c3).toBe(3)
-
-  // lifecycle
-  expect(calls).toEqual([
-    'created from mixin A',
-    'created from mixin B',
-    'created from Test'
-  ])
-
-  // methods
-  expect(instance.foo()).toBe(1)
-  expect(instance.bar()).toBe(1)
-  expect(instance.baz()).toBe(1)
-}
-
-describe('mixins', () => {
-  it('should work with classes', () => {
-    class Test extends mixins(ClassMixinA, ClassMixinB)<
-      { p3: string },
-      { d31: number }
-    > {
-      static props = {
-        p3: String
-      }
-
-      d3 = 1
-      data(): any {
-        return {
-          d31: 2
-        }
-      }
-
-      get c3() {
-        return this.d3 + this.d31
-      }
-
-      created() {
-        calls.push('created from Test')
-      }
-
-      baz() {
-        return this.d3
-      }
-    }
-
-    const instance = createInstance(Test, {
-      p1: '1',
-      p2: '2',
-      p3: '3'
-    })
-
-    // we duplicate the assertions because they serve as type tests as well
-
-    // data
-    expect(instance.d1).toBe(1)
-    expect(instance.$data.d11).toBe(2)
-    expect(instance.d2).toBe(1)
-    expect(instance.$data.d21).toBe(2)
-    expect(instance.d3).toBe(1)
-    expect(instance.d31).toBe(2)
-
-    // props
-    expect(instance.p1).toBe('1')
-    expect(instance.$props.p2).toBe('2')
-    expect(instance.p3).toBe('3')
-    expect(instance.$props.p1).toBe('1')
-    expect(instance.$props.p2).toBe('2')
-    expect(instance.$props.p3).toBe('3')
-
-    // computed
-    expect(instance.c1).toBe(3)
-    expect(instance.c2).toBe(3)
-    expect(instance.c3).toBe(3)
-
-    // lifecycle
-    expect(calls).toEqual([
-      'created from mixin A',
-      'created from mixin B',
-      'created from Test'
-    ])
-
-    // methods
-    expect(instance.foo()).toBe(1)
-    expect(instance.bar()).toBe(1)
-    expect(instance.baz()).toBe(1)
-  })
-
-  it('should work with objects', () => {
-    class Test extends ((mixins as any)(
-      ObjectMixinA,
-      ObjectMixinB
-    ) as ComponentClass)<{ p3: string }, { d31: number }> {
-      static props = {
-        p3: String
-      }
-
-      d3 = 1
-      data(): any {
-        return {
-          d31: 2
-        }
-      }
-
-      get c3() {
-        return this.d3 + this.$data.d31
-      }
-
-      created() {
-        calls.push('created from Test')
-      }
-
-      baz() {
-        return this.d3
-      }
-    }
-
-    assertMixins(Test)
-  })
-
-  it('should work with a mix of objects and classes', () => {
-    class Test extends ((mixins as any)(
-      ClassMixinA,
-      ObjectMixinB
-    ) as ComponentClass)<{ p3: string }, { d31: number }> {
-      static props = {
-        p3: String
-      }
-
-      d3 = 1
-      data(): any {
-        return {
-          d31: 2
-        }
-      }
-
-      get c3() {
-        return this.d3 + this.$data.d31
-      }
-
-      created() {
-        calls.push('created from Test')
-      }
-
-      baz() {
-        return this.d3
-      }
-    }
-
-    assertMixins(Test)
-  })
-})
diff --git a/packages/runtime-core/__tests__/parentChain.spec.ts b/packages/runtime-core/__tests__/parentChain.spec.ts
deleted file mode 100644
index c010c9dfc..000000000
--- a/packages/runtime-core/__tests__/parentChain.spec.ts
+++ /dev/null
@@ -1,120 +0,0 @@
-import {
-  h,
-  Component,
-  observable,
-  nextTick,
-  renderInstance
-} from '@vue/runtime-test'
-
-describe('Parent chain management', () => {
-  it('should have correct $parent / $root / $children', async () => {
-    let child: any
-    let grandChildren: any[] = []
-
-    const state = observable({ ok: true })
-
-    class Parent extends Component {
-      render() {
-        return h(Child)
-      }
-    }
-
-    class Child extends Component {
-      created() {
-        child = this
-      }
-      render() {
-        return [state.ok ? h(GrandChild) : null, h(GrandChild)]
-      }
-    }
-
-    class GrandChild extends Component {
-      created() {
-        grandChildren.push(this)
-      }
-      unmounted() {
-        grandChildren.splice(grandChildren.indexOf(this), 1)
-      }
-      render() {
-        return h('div')
-      }
-    }
-
-    const parent = await renderInstance(Parent)
-
-    expect(child.$parent).toBe(parent)
-    expect(child.$root).toBe(parent)
-
-    grandChildren.forEach(grandChild => {
-      expect(grandChild.$parent).toBe(child)
-      expect(grandChild.$root).toBe(parent)
-    })
-
-    expect(parent.$children).toEqual([child])
-    expect(grandChildren.length).toBe(2)
-    expect(child.$children).toEqual(grandChildren)
-
-    state.ok = false
-    await nextTick()
-    expect(grandChildren.length).toBe(1)
-    expect(child.$children).toEqual(grandChildren)
-  })
-
-  it('should have correct $parent / $root w/ functional component in between', async () => {
-    let child: any
-    let grandChildren: any[] = []
-
-    const state = observable({ ok: true })
-
-    class Parent extends Component {
-      render() {
-        return h(FunctionalChild)
-      }
-    }
-
-    const FunctionalChild = () => h(Child)
-
-    class Child extends Component {
-      created() {
-        child = this
-      }
-      render() {
-        return [
-          state.ok ? h(FunctionalGrandChild) : null,
-          h(FunctionalGrandChild)
-        ]
-      }
-    }
-
-    const FunctionalGrandChild = () => h(GrandChild)
-
-    class GrandChild extends Component {
-      created() {
-        grandChildren.push(this)
-      }
-      unmounted() {
-        grandChildren.splice(grandChildren.indexOf(this), 1)
-      }
-      render() {}
-    }
-
-    const parent = await renderInstance(Parent)
-
-    expect(child.$parent).toBe(parent)
-    expect(child.$root).toBe(parent)
-
-    grandChildren.forEach(grandChild => {
-      expect(grandChild.$parent).toBe(child)
-      expect(grandChild.$root).toBe(parent)
-    })
-
-    expect(parent.$children).toEqual([child])
-    expect(grandChildren.length).toBe(2)
-    expect(child.$children).toEqual(grandChildren)
-
-    state.ok = false
-    await nextTick()
-    expect(grandChildren.length).toBe(1)
-    expect(child.$children).toEqual(grandChildren)
-  })
-})
diff --git a/packages/runtime-core/jsx.d.ts b/packages/runtime-core/jsx.d.ts
index a7110a110..6756af384 100644
--- a/packages/runtime-core/jsx.d.ts
+++ b/packages/runtime-core/jsx.d.ts
@@ -1,7 +1,7 @@
 declare namespace JSX {
   interface Element {}
   interface ElementClass {
-    render(props: any, slots: any, attrs: any): any
+    $props: {}
   }
   interface ElementAttributesProperty {
     $props: {}
diff --git a/packages/runtime-core/package.json b/packages/runtime-core/package.json
index 7e64d48d8..81356f1ce 100644
--- a/packages/runtime-core/package.json
+++ b/packages/runtime-core/package.json
@@ -20,7 +20,6 @@
   },
   "homepage": "https://github.com/vuejs/vue/tree/dev/packages/runtime-core#readme",
   "dependencies": {
-    "@vue/observer": "3.0.0-alpha.1",
-    "@vue/scheduler": "3.0.0-alpha.1"
+    "@vue/observer": "3.0.0-alpha.1"
   }
 }
diff --git a/packages/runtime-dom/jsx.d.ts b/packages/runtime-dom/jsx.d.ts
index c66a0166d..059da503c 100644
--- a/packages/runtime-dom/jsx.d.ts
+++ b/packages/runtime-dom/jsx.d.ts
@@ -751,7 +751,7 @@ type NativeElements = {
 declare namespace JSX {
   interface Element {}
   interface ElementClass {
-    render(props: any, slots: any, attrs: any): any
+    $props: {}
   }
   interface ElementAttributesProperty {
     $props: {}
diff --git a/yarn.lock b/yarn.lock
index 6e0a4d6f1..e2edd9616 100644
--- a/yarn.lock
+++ b/yarn.lock
@@ -6072,10 +6072,10 @@ typedarray@^0.0.6:
   resolved "https://registry.yarnpkg.com/typedarray/-/typedarray-0.0.6.tgz#867ac74e3864187b1d3d47d996a78ec5c8830777"
   integrity sha1-hnrHTjhkGHsdPUfZlqeOxciDB3c=
 
-typescript@^3.1.3:
-  version "3.1.3"
-  resolved "https://registry.yarnpkg.com/typescript/-/typescript-3.1.3.tgz#01b70247a6d3c2467f70c45795ef5ea18ce191d5"
-  integrity sha512-+81MUSyX+BaSo+u2RbozuQk/UWx6hfG0a5gHu4ANEM4sU96XbuIyAB+rWBW1u70c6a5QuZfuYICn3s2UjuHUpA==
+typescript@^3.5.0:
+  version "3.5.1"
+  resolved "https://registry.yarnpkg.com/typescript/-/typescript-3.5.1.tgz#ba72a6a600b2158139c5dd8850f700e231464202"
+  integrity sha512-64HkdiRv1yYZsSe4xC1WVgamNigVYjlssIoaH2HcZF0+ijsk5YK2g0G34w9wJkze8+5ow4STd22AynfO6ZYYLw==
 
 uglify-js@^3.1.4:
   version "3.4.9"