China's investment around the world has reached new highs every year this decade. This year it will likely smash the 2015 total, topped by a record $45 billion acquisition. Yet the outlook may be for a shortfall - many Chinese firms, including those owned by the state, face new financial limits. Governments and businesses dealing with them must adjust or risk getting burned.

Start at the top, because the money flows down. For 35 years, China's foreign exchange pile climbed with its economy, peaking in mid-2014 at almost $4 trillion held by the government plus another $800 billion at state-owned banks. For the last two years, however, the pile has shrunk. Official numbers indicate a drop of close to $1.2 trillion from the peak.

This still leaves a huge amount and Chinese investment around the world will certainly continue. But the forex decline has been stark at several points and total holdings are still slipping (official reserves are stable). Chinese regulators are understandably nervous, telling prominent companies to prove they have the funds for announced purchases or to slow their global expansion. 

For those which do not slow, competition for financing may become fierce. The $45 billion acquisition is for Swiss agro-tech giant Syngenta. The bid is fronted by ChemChina, a state-owned enterprise (SOE), but it is government investment arm China Reform Holdings which is responsible for most of the funds. That's tens of billions of government dollars no longer available to other investors.

And the competition goes well beyond Syngenta. In fall 2013, Beijing proudly announced a set of diplomatic and commercial initiatives eventually called "one belt, one road" (OBOR). A large swath of countries in Eurasia and parts of Africa are intended to receive huge doses of Chinese investment, loans, and construction expertise.

Prior to OBOR, China had already been quite active in investment and construction in these countries, with transactions valued well into the hundreds of billions of dollars. The OBOR price tag started at $900 billion (over an indefinite period) and must go considerably higher than that, or OBOR will not be nearly as grand a development as has been constantly proclaimed.

When OBOR was introduced, foreign currency holdings were still rising quickly. Now they are both smaller and still dropping. If OBOR does turn out to be as sizable as many anticipate, Chinese activity outside of OBOR will therefore see financing constraints that would have been unthinkable just three years ago.

There may have been a prominent example of this, already. Just a few days after adding to its much-publicized $14 billion bid for Starwood hotels, state-owned Anbang Insurance surprisingly walked away, barely bothering with an explanation. Here's one: Anbang could not afford the purchase on its own.

The deal was to be financed by state-owned China Construction Bank. SOEs have always been presumed to have good access to the government stash and Anbang even has stakes in China Construction Bank and other major lenders. But if a more money-conscious Beijing does not want to pay for a deal, the state bank leaves and the deal dies, whether or not a well-connected SOE is involved.

It should be alarming that Anbang is actually in better financial shape than many overseas Chinese investors, especially other SOEs. State giant China Ocean Shipping is often portrayed as "coming to the rescue" of struggling Greece by buying its Piraeus port. China Ocean Shipping is on multiple measures more indebted than the port is.

The previous response to that kind of oddity has been to note that China Ocean Shipping can easily tap government resources. Now rising overseas investment and declining foreign exchange mean resources may not be available.

The situation can be yet more pointed. China Railway Corporation runs the national rail system, putting it as close to the government proper as a firm can be. At over $600 billion, it has larger debts than most countries. It is interested in greater activity overseas. When it arrives at the door, is it the government or an utterly insolvent company? China offers both. Either way, it cannot be assumed that financing is automatic.

A key step in engaging China Inc. from now on will be to critically evaluate the money trail, even if the investor appears extremely prominent and well-connected. Either a sizable breakup fee should be included, the Chinese partner should fully open its books (which will be rare), or a backer should always be present.

These backers will most frequently be the large state banks; Bank of China alone may have supported 30 percent of the country's outward investments last year. Their presence will affirm that increasingly contested funds are indeed available. But if the banks wander off at some point, the deal may wander off with them. The days of China Inc. always having the money are ending.