This article by Turloch Mooney originally published on JOC.com.

The number of overseas port locations with investment from China's big three terminal operators has quadrupled in the past five years to the point where it comfortably eclipses the number of facilities they operate in their home country, according to research from shipping industry analyst Drewry.

Cosco Shipping Ports, Shanghai International Port Group, and China Merchants Port Holdings have together invested in nearly 40 overseas port locations, a dramatic rise from around 10 locations just five years ago.

But with just 15 percent of combined equity operated TEU throughput coming from outside of China in 2016, Chinese operators still have some way to go before their international throughput volumes match those of the big four traditional international players APM Terminals, DP World, Hutchison Ports, and PSA International. But overseas terminal investments by the three Chinese operators are now more than half the combined number of terminals owned by the big four international operators.

"Domestic China port volumes are so huge they will always represent a big percentage of total volumes," said Neil Davidson, a senior analyst in the ports and terminals practice of the London-based consultants.

Davidson said it was clear the Chinese players were willing and able to pay a premium for assets and have the firepower to make aggressive bids on projects because Chinese banks offer loans with interest rates as low as 2 percent to support the Belt and Road initiative.

In its recent investment in Spanish container and rail terminal operator Noatum Ports, Cosco Shipping Ports paid a significant premium compared with other recent port asset purchase deals, Drewry said.

The Chinese terminal operator paid $228 million for a 51 percent stake in the company, which operates container terminals in Valencia and Bilbao, as well as the Conterail dry port in Madrid and Noatum Rail Terminal in Zaragoza.

"Overseas acquisitions by Chinese port operators are earnings-accretive investments and diversify geographical risk simultaneously," Davidson said.

So far there is scant evidence to back claims that overseas port investments by Chinese companies may cool as Beijing implements measures to improve control of capital outflows. Chinese operators continue to hunt for opportunities in multiple world regions, particularly Asia, Africa, and Latin America.

Earlier this month, Hong Kong-listed red chip China Merchant Port Holdings (CMPH) announced its first investment in South America with the acquisition of a 90 percent stake in TCP Participações, the operator of the Port of Paranaguá in Brazil.

The facility is the second-largest container terminal in Brazil with current capacity of 1.5 million TEU. CMPH said it would increase capacity to 2.4 million TEU with expansion works due to commence later this year and expected to be complete by the second half of 2019.

"In spite of the existing ports in Southern Asia, Africa, North America, and Europe, the group can further expand its business to the Latin America region through the existing acquisition," CM Port said in a statement announcing the deal.

The investment would provide the company with opportunities to make use of the marine transportation hub to develop its logistics network, an export/import and industrial zone, and potential residential projects and related financial service platforms, the company said.

Chinese operators continue to look for investment opportunities in individual facilities as well as portfolio investments along the lines of the acquisition of a 49 percent stake in CMA CGM's Terminal Link, Davidson said.

The traditional international operators are facing a challenging time to compete with China for assets in emerging markets. Their own expansion strategies have been more cautious in recent years as sluggish demand and industry trends such as the deployment of larger vessels and customer consolidation have been putting a squeeze on margins.

With global container throughput forecast to grow at between 5 percent and 6 percent this year, the improving demand environment is supporting better results in terms of volume and revenue growth. But industry consolidation as a result of merger and acquisition activity among shipping lines is resulting in downward pressure on handling tariffs, and operators continue to spend on infrastructure and process improvements to deal with larger vessels and call sizes in an increasingly competitive market.