9309651 Nee This project will test theories of market transitions from state socialism with data from a national social survey conducted in rural China in 1989. As markets replace socialist redistribution, changes in the structure of opportunity and incentives give rise to conditions more favorable to direct producers relative to redistributive organizations, thus producing fundamental changes in the dynamics of stratification. This study will extend market transition theory to empirical challenges posed by the growth of rural industry, regional variation in the shift to markets, and increasing income inequality. A new institutionalist perspective will also contribute to the empirical analysis, as hypotheses are tested on the embeddedness of markets, expanding the current social network perspective of economic sociology to include the institutional framework of the economy. %%% The results will contibute significantly to the scientific literature on social change, as well as to economic sociology. The knowledge gained will also be available to policy-makers and others who need to understand the changes currently in progress in China. ***