This dissertation research will analyze China's transition to capitalism by investigating the emergence of inter-firm linkages. It examines systematically the subcontracting relations between Shanghai's urban state-owned enterprises and rural township- and village-owned enterprises, as well as the effect of these linkages on regional growth and development. Three industries (termed commodity chains) have been selected for qualitative and quantitative study: air conditioners, automobiles, and refrigerators. Interviews with approximately 70 enterprises in each industry are planned. Additional documentary evidence will come from the Shanghai Municipal Library and from government sources. The results are important to understanding the way firms are linked in a capitalist production process. Insights into regional economic growth and competitiveness are likely.