China giving loans to countries across world to increase its influence: US official

China is using the strategy of giving credit and loans to countries across the world to become a global power with great influence, a top US intelligence official has said.

Daniel R Coats, Director of National Intelligence, told members of the Senate Armed Services Committee during a Congressional hearing said China was using a number of techniques that are far more than just the typical military land grab to increase its influence.

"While China is modernising its military, is increasing its spending, most of it appears to be done for a deterrence purpose, rather than an aggressive purpose. They clearly have a strategy of using credit and loans to countries around the world, particularly in geo-strategic places, then combining it with some military capacity -- South China Sea's -- their new base in Djibouti," Coats said.

"We see that China is seeking, I think, to become a world power with great influence on a global basis. And they're using a number of techniques that are far more than just the typical military land grab that we see more likely with Russia, rather than China," Coats said.

He was responding to a question from Senator Angus King on the intelligence community's assessment of what China wants.

"Are they moving toward military aggression and enlargement of their territory? Or are they looking more toward political and economic influence in the region?" he asked.

"It appears to be the latter," Coats said.