While most scholars seem to agree with Tsao (1990) as to the inadequacy of the notion of "sentence", as traditionally defined in Indo-European languages, for the analysis of Chinese, two opposing trends have emerged in defining the basic grammatical units for Chinese. On the one hand, Tsao himself extends the study of grammar into its discourse contexts, taking the topic chain, "a stretch of discourse headed by one or more topics...followed by one or more comment clauses" as the basic unit. On the other hand work in the structuralist tradition (Zhu 1985, Lu 1993) takes the smaller unit of "phrase" as basic, and more recent investigations into the grammar of spoken Chinese from an intonational viewpoint (Tao 1991, 1996) seem to confirm this insight. In attempting to reconcile these two tendencies in the description of Chinese grammar, what is needed is a way of linking grammatical and discourse organisation: in effect, seeing grammar as one the layers of meaning of the text. In this project, determining the status of the verb is crucial since it is commonly regarded as central to the definition of grammatical units, the principle of "one verb per clause" (Tao 1996) often being invoked as a way of justifying the boundaries of the clause. However, as has often been noted, the range of elements of the verb class in Chinese is so wide, and their potential to combine freely with each other is so great, that applying such a principle in practice is very difficult. The present study recognises the basic structure of successive verbal elements as a logical one (Ouyang 1986) defined by a combination of taxis and logico-semantic relationships - in effect treating all verb combinations like serial verb constructions (Li & Thompson 1981). The boundaries of the clause can then be determined by the Theme and Rheme structure (Fang et al. 1995), and various verbal elements then be identified as functioning either textually, to introduce and focus on particular pieces of information, or interpersonally, to mediate the exchange between interlocutors in terms of mood and modality, or experientially, to represent the main and associated processes in the model of experience given by the clause. Such a multifunctional analysis allows us not only to account for all the different types of structures entered into by verbal elements in Chinese, but also provides a way of reconciling competing views of basic grammatical structure in Chinese.