Dear Sam,
My suggestion is that you don't use chain at all on a 1/700 kit.  I really think that the finest chain available is still far to big to give a convincing scale effect.  
If I lay a length of the finest chain that I have been able to obtain (I think it's somewhere in excess of 40 links per inch) on the deck of a 1/700 model, then I have something that is standing proud from the deck by about 2 scale feet.  When I was on board the USS Wisconsin last year, I could easily step over the chains, the individual links laid about 1foot on maybe slightly less proud of the deck.  On the destroyer HMS Cavalier at Chatham, each link is probably less than 6 inches long.
Although I would probably use chain on a 1/350 battleship (not that it is my scale), in 1/700 I have been getting much better visual results by braiding fine wire.  I do not get a real chain but the visual effect is much more convincing.
Take some wire from the core of a high quality hi-fi speaker cable or from stripping down co-axial TV aerial cable.  This will be about 0.08mm in diameter.  Take three lengths, knot together at the end and hold the end in a vice or pin it to your workbench to hold it secure.  You can then plait or braid the wires in exactly the same way that a girl will plait her hair.  If you don't know the sequence of moves, ask any woman of your acquaintance.  It's dead simple.
What you end up with is something that is fairly convincing for fine chain, although a bit flat in cross section.
If you want something a bit more three dimensional then you can use four strands of wire and braid what is known as a "four strand square sinnet"  Precise instructions for doing this can be got either by obtaining "The Ashley Book of Knots" by Clifford Ashley from your library or by purchasing my recently published book "Ship Models from Kits" by David Griffith. (That was a totally shameless plug, and naturally I'd prefer you to make the purchase, though I will not be offended if you go for the library loan, as The Ashley Book of Knots is just the most delightful volume!!!)
Using the wire from hi-fi cable will give you a "chain" that is an appropriate size for a destroyer or cruiser.  For a larger ship I'd suggest exactly the same technique but using a slightly thicker wire, such as 0.1mm dia or 0.125mm dia copper wire which I obtained from 
www.wires.co.uk here in Britain.
If you go across onto 
www.modelwarships.com you will see this type of chain on my model of HMAS Sydney, which is in the gallery section of the site.  I haven't got anything on this site yet, as I've not really been frequenting it very often and haven't worked out to do things with photobucket.
Give it a go, it really isn't that hard, and you'll be surprised how much better it looks.
Kind regards,
David Griffith