China has stepped up as a global economic force, offering low-interest loans to developing countries while the United States has tapered off on the economic lending market due to the recent recession. China used foreign aid to give Namibia a $100 million loan. Namibia used the loan to buy cargo scanners, however, China required them to purchase the scanners from the Nuctech Company Ltd., which until recently was run by Chinese president Hu Jintao’s son.

The scanners are available from a rival U.S. company for $25 million cheaper than the amount Namibia was required to pay from Nuctech.

“China has not invaded her neighbors for many decades, but has begun to do so economically, though not militarily,” said Assistant Professor of Religious Studies Eric Mortensen.

China often requires that the countries who receive these loans buy from Chinese-controlled companies, so the majority of the loan money goes right back into China’s economy. By offering low-interest loans to developing nations such as Namibia, China is also gaining access to the natural resources that they need.

“By giving out loans, China is simply trying to fuel their record-breaking economic development,” said sophomore Nicholas Choy in an e-mail interview. “In terms of what this means for the U.S., China is going to be the next superpower. When this happens, there could be some sort of conflict, however I don’t believe China means to take up the role that the U.S. plays now (a militaristic imperial power). China just means to have a powerful economy and become a fully modernized country.”

Many of the contracts that China has awarded to Chinese-run companies are being either cancelled or investigated, including the 2007 contract with Namibia. China has refused to comply with investigators looking into the legality of the contract with Nuctech. The company has also been accused of facilitating the deal with $4 million in illegal kickbacks.

“China has been using three powerful economic tools to influence other countries in the world: trade, foreign aid and currency,” said Associate Professor of Political Science George Guo. “China is becoming an important donor to developing countries. Chinese aid often supports infrastructure development that expands resource access.”

Some nations that China offers aid to compare prices, both monetary and otherwise, for what they need before accepting China’s loans.

“Very often they are getting something they wouldn’t be able to get without China’s financing,” said Chris Alden, a specialist on China-African relations with the London School of Economics and Political Science, to The New York Times. “They presume that the Chinese are going to give value for money.”

The aid China gives is beneficial to the developing nations but more so for China. China gets undisputed access to natural resources that it needs, such as oil. Given that they have a closed-bid policy, they also choose who the contracts go to.

China’s use of development aid is not limited to the African continent, but also has questionable presence in other parts of the world.

The Center for International Law, a Manila-based nonprofit group, is investigating a contract between China and the Philippines. The Center accused China of charging unfair prices for Chinese-made goods as part of an aid deal.