American companies are raising hundreds of millions of dollars to go shopping for businesses in China, considered the largest potential consumer market in the world with 1.3 billion citizens.

Now a newly started Atlanta company called Middle Kingdom Alliance Corp. is getting in the game. It has begun trying to raise $25 million to merge with or invest in a Chinese company.

Middle Kingdom Alliance has three local principals: CEO Bernard J. Tanenbaum III, General Counsel David A. Rapaport and Chief Financial Officer Fred A. Brasch.

Tanenbaum is an investment banker who founded Primus Capital LLC in 1997. Rapaport and Brasch are with High Capital Funding LLC. They said they wouldn't comment for this story because of Securities and Exchange Commission regulations on companies intending to go to market.

Middle Kingdom Alliance is raising money as a "blank-check company," meaning its organizers would have virtually no restrictions on selecting prospective businesses to buy.

Other U.S. companies with structures similar to Middle Kingdom Alliance's have raised $418 million for investments in China, according to an April 21 filing with the Securities and Exchange Commission by Middle Kingdom Alliance.

Some of these have already completed their initial public offerings (IPOs), and several have projects under way.

Among these is Dahua Inc. Formed as a blank-check company in 2002, it acquired a company which had a subsidiary doing business in China. Dahua is now building luxury single-family homes in a Beijing suburb.

A New York-based blank-check company called Great Wall Acquisition Corp. raised $21 million in a March 2004 IPO. The company recently announced it will ask its shareholders to vote on whether to acquire ChinaCast Communication Holdings Ltd., a satellite distance-learning company with shares traded on the Singapore stock exchange.

 Another New York-based company, China Mineral Acquisition Corp., raised $24 million in an August 2004 IPO. On Feb. 23, the company announced it has a memorandum of understanding to buy Sunwing Energy Ltd. from Ivanhoe Energy Inc. (Nasdaq: IVAN). Sunwing owns royalties in several Chinese oil fields and explores for natural gas.

China Unistone Acquisition Corp., also based in New York, raised $20.7 million in a November 2004 IPO. It has announced plans to acquire Sihitech Co. Ltd., which provides IT services and systems integration for the Chinese banking industry.

A San Diego company, Chardan South China Acquisition Corp., raised $31 million in August to do a deal in China.

And a Hong Kong company called Shanghai Century Acquisition Corp. is trying to raise $100 million to buy Chinese businesses.

Middle Kingdom Alliance's prospectus makes the risks it faces sound pretty grim. There are no guarantees the principals will find a good company to buy. There's a possibility they won't be able to close a deal due to China's communist-style economy, complex legal system and different cultural norms. And finally, there's no promise that a Chinese company will be profitable.

In other words, investors have to trust the fund managers' expertise. And they'll have to shift through a lot of rocks to find the priceless diamond.

Financial information about Chinese companies is hard to come by, and the country's auditing system is very different.

"They're going to need a major-league China partner," said state Sen. Sam Zamarripa, D-Atlanta, a principal with Heritage Capital Advisors LLC.

China's scale offers a lot of opportunities, said Zamarripa, but the risks are just as big.

"Assuming they manage their risk, like every investor does, and choose partners carefully, they can do really well."

Matchmaking is key to success in China, said Rongrong Liu, executive director of the Georgia China Alliance, which helps make connections between Chinese and Georgia businesses.

"I think it's a good market if they can identify a good project," said Liu. "The matchmaker has to be really good."

Her group soon will launch a Web site to help companies find each other, at www.georgiachina.com.

Middle Kingdom's board of directors appears to include some impressive matchmakers, with six businessmen based in Shanghai, Beijing and Hangzhou. Among them is Anthony Ng, founder of Cathay Forest Products Inc., which plants and harvests fast-growing timber. He's represented investors from Hong Kong, and in the 1980s helped to brew and market Pabst Blue Ribbon beer in China.

Despite the high-risk game and inconsistencies of the Chinese government, there's an almost endless interest in flooding China with American money.

Cumulative U.S. investment in China is valued at $48 billion, according to the U.S. State Department. Direct foreign investment from the United States to China in 2005 was $3.1 billion, according to the Chinese Ministry of Commerce.

That's a 19 percent decline from 2004. "It will probably bounce up this year," said Barry Naughton, a professor of Chinese economy at the University of California, San Diego's Graduate School of International Relations and Pacific Studies.

But he also emphasized the risks. "It's the Wild West," said Naughton. "There are lots of risks, and lots of things that won't pan out. There's also a few that might."