Barry Genkin, a lawyer with Blank Rome LLP in Philadelphia, has a list of ground rules for U.S. CEOs who travel with him to China when they want to do a deal. At least two of these rules revolve around food: Always wait for your host to take the first bite and don't forget to eat once he does. That may not sound difficult, but getting through an authentic Chinese banquet is just one of the many cultural challenges that can make or break chances of a U.S. executive landing a deal on the mainland.

"Most of these meetings are done over long extended banquet meals. You get fed well, but do you want to eat them?" says Genkin. He recalls one banquet where he was the only Westerner at the table. "I was really struggling. Things were going around on a lazy Susan, and I couldn't identify what they were."

At one point, he spotted what he thought was a large bowl of hot and sour soup. Then someone dumped in a "huge" bullfrog. "Eleven people were watching me to see what I'd do while they were eating it like it was filet mignon," he says. Genkin recalls picking up his chopsticks and taking a nibble before putting them down again. "They appreciate that you at least try," he says.

These are just a few of the rules of the road that U.S. CEOs are being forced to learn as they focus on opportunities in emerging markets such as China. It's a market that has been growing ever larger on the acquisition radar screens of U.S. multinationals in recent years. Last year, it was the third-largest destination for U.S. emerging-market acquisitions or stake purchases, with 165 such deals totaling $7.2 billion -- up sharply from just 131 deals totaling $3.37 billion in 2009, according to Dealogic. So far this year, U.S. companies have announced or closed 42 deals totaling $2.47 billion. Companies that have made acquisitions in China over the past three years include Cardinal Health Inc., Coty Inc., TM Entertainment & Media Inc., Cooper Tire & Rubber Co., Best Buy Co. and Crown Holdings Inc., as well as flagship financial firms like Blackstone Group LP.

U.S. lawyers who specialize in Asia say that middle-market companies are increasingly joining multinationals in the hunt. In a June 2010 survey, the commercial banking group of HSBC Holdings plc said it surveyed an undisclosed number of U.S. midsized companies and found that 45% of senior executives expected to conduct business with mainland China over the next two years, followed by 27% targeting India.

"The middle market is waking up," Genkin says. "I'd say out of every 10 companies I work with, eight are in the middle market, and they're saying [Asia] is where they need to be -- how do they do it? This is happening with a greater sense of urgency, primarily because there's no growth in Western Europe." They're looking at, among other industries, green energy, technology and healthcare.

"There's a huge emerging middle class and opportunities to sell them medical devices and other products," he adds.

While opportunities beckon, challenges beyond banquets exist at every turn. Apart from local regulatory and legal complexities, there's the difficulty of completing local due diligence and not violating the Foreign Corrupt Practices Act, which prohibits, among other things, bribing foreign officials.

Over the past few years, the Department of Justice and the Securities and Exchange Commission have been cracking down on FCPA violations. So far this year, the SEC has settled four cases, involving the likes of IBM Corp. and Tyson Foods Inc. Last year, it settled 15 cases. Often it can be tricky to distinguish between local business customs and breaking U.S. law.

"How do they do business? To whom do they sell? Do they pay money to government officials? Do they have related transactions with other businesses where they're benefiting? There are many things that are acceptable in places like China that are taboo here," Genkin says. "Most Americans are clueless."

It doesn't help that Chinese officials often ignore due diligence questions they consider meddlesome. Which is why, he says, he spends so much time working on building trust between U.S. CEOs and their overseas counterparts. For the foreseeable future, Genkin expects most middle-market companies to make inroads through joint ventures, since it's still tough to get past legal and regulatory hurdles associated with outright acquisitions. Besides, the bigger the deal the more banquets executives have to eat their way through.

For anyone who's seen a bullfrog in his soup, smaller may be better.

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