Contents

• China and the IFIs: Key Policy Issues
• Historical Context
• China as a Recipient of Development Assistance
• China's Representation at the IFIs
• PRC Firms and MDB Procurement
• Selected Policy Options for Congress

China and the IFIs: Key Policy Issues

The United States and the People's Republic of China (PRC, or China) are the world's two largest economies. The two governments have foreign policy and economic priorities that sometimes overlap and sometimes diverge. The international financial institutions (IFIs)—including the International Monetary Fund (IMF), the World Bank, and regional multilateral development banks (MDBs)—can provide a formal venue through which the United States and China, in coordination with other IFI members, work to advance economic cooperation on areas of agreement and negotiate differences on a range of international economic issues. The IFIs can also serve as a forum for political and economic competition between the two countries.

Key policy questions about China's role in the IFIs include the following:

• To what extent, if any, should the World Bank and the Asian Development Bank continue to fund development projects in China? China's level of economic development has increased over the past two decades, and it has sizeable resources it could use to pay for development projects itself, rather than relying on multilateral financing. At the same time, World Bank and Asian Development Bank projects include environmental, labor, and procurement standards that might not otherwise be adopted, and multiyear development projects provide visibility into China's economy.
• What is the appropriate representation of China at the IFIs? Countries with larger economies generally have larger voting shares at the IFIs. By this metric, China is underrepresented at the IFIs—China's voting share does not reflect its rapid economic growth over the past two decades. Increasing China's voting share could strengthen the legitimacy of the IFIs and raise additional resources for the IFIs, but it might also allow China to advance policies that are not in line with U.S. policy and interests.
• What are the implications of PRC firms bidding on and implementing a significant share of MDB infrastructure contracts? Some PRC firms that bid on and win MDB contracts are state-owned enterprises (SOEs). SOEs benefit from explicit and/or implicit government subsidies, which can result in cost savings for MDB projects. At the same time, it might raise concerns about whether private companies are able to compete on a level playing field when bidding on MDB contracts. There may also be concerns about the number of PRC firms that have been banned from bidding on MDB contracts due to fraudulent and corrupt business practices.

These policy issues are discussed in more detail below, following brief background information on U.S. and PRC membership in the IFIs. The report concludes with policy options for Members of Congress seeking to shape U.S. policy toward China at the IFIs, if they are interested in doing so.¹

Historical Context

The United States, in coordination with European countries, led the creation of the IMF and the World Bank at the end of World War II. Both the World Bank and IMF are specialized agencies of the United Nations (UN) system; as such, they are legally independent intergovernmental organizations with their own constitutions, rules, membership, organs, and financial resources.² The mission of the IMF is promoting international monetary stability; the World Bank is focused on financing economic development in low- and middle-income countries.

In the decades following World War II, the United States also helped create MDBs tailored to the needs of specific regions, including the Asian Development Bank (AsDB), the Inter-American Development Bank (IDB), and the European Bank for Reconstruction and Development (EBRD). The United States also joined the African Development Bank (AfDB) after membership opened to countries outside of Africa.³

The United States continues to play a critical leadership role at these institutions, where it has the largest or second-largest voting power.⁴ In some cases, the United States has unique veto power over major policy decisions, such as amendments to the charters governing the institutions.⁵ Several studies suggest that the United States also has considerable informal influence over IFI operations—for example, that U.S. allies tend to secure more favorable IFI programs than other countries.⁶

Figure 1. IFI Membership: U.S. and China

Source: Created by CRS using IFI membership data.

The Republic of China (ROC) joined the IMF and the World Bank as a founding member in 1945 (Figure 1). Four years later, in 1949, the Communist Party of China (CPC) defeated ROC forces on mainland China and proclaimed the establishment of the PRC. The ROC's ruling party, the Kuomintang (KMT), retreated to Taiwan and moved the seat of the ROC government there. Like the United States, the IMF and the World Bank continued to recognize the ROC as the legitimate representative of China for many years.

In December 1978, the United States recognized the PRC as "the sole legal Government of China" and terminated diplomatic relations with the ROC on January 1, 1979.⁷ The United States maintains unofficial relations with Taiwan pursuant to the 1979 Taiwan Relations Act (P.L. 96-8; 22 U.S.C. §§3301 et seq.)

In 1980, following years of negotiations, the IMF and the World Bank recognized the PRC as the official representative of China.⁸ The ROC is not a member of the IMF or the World Bank.

The PRC joined the regional development banks in the following years: the AfDB in 1985, the AsDB in 1986, the IDB in 2009, and the EBRD in 2016. The PRC also led the creation of a new multilateral development bank, the Asian Infrastructure Investment Bank (AIIB), in 2016.⁹ The United States is not a member of the AIIB.¹⁰

China as a Recipient of Development Assistance

The World Bank and the AsDB regularly fund development projects in China; between 2020 and 2025, the World Bank and the AsDB extended more than $17 billion in financing to the PRC government and PRC firms (Figure 2). The amount per year has declined by more than half from 2020 to 2025, from $4.3 billion to $2 billion. In 2025, China accounted for less than 3% of World Bank and AsDB financing.

Figure 2. World Bank and AsDB Financing in China, 2020-2025

Source: Created by CRS using World Bank, International Finance Corporation (IFC), and AsDB project data. Notes: The International Bank for Reconstruction and Development (IBRD) is the World Bank's main lending facility, and it provides market-based financing to middle- and some low-income countries. The IFC is part of the World Bank Group and provides financing to private-sector firms in developing countries.

At least two major objections are raised about MDB financing to China. First, China has its own financial resources, including $3.5 trillion in foreign exchange, that it could use to fund domestic development projects.¹³ This is the largest reserve holdings of any country in the world—no other government has similar resources available. PRC reserves also exceed the total financial resources committed to the core IMF and World Bank lending facilities combined.¹⁴ China itself is a major source of financing for developing countries, such as through the One Belt, One Road Initiative and the AIIB (of which China is the largest financial contributor).¹⁵

Figure 3. China and World Bank Graduation

Source: Created by CRS using data from the World Bank.

Second, since 2016, China's level of economic development (as measured by a country's gross national income per capita) has annually exceeded the World Bank's threshold for initiating discussions about "graduating" from financial assistance (Figure 3). (The AsDB also uses the World Bank's threshold.) The gap between the graduation threshold and China's level of economic development has grown over the past decade, and in 2025, China nearly met the threshold for classification as a high-income country.

A 2018 agreement among World Bank members limits financing for countries above the graduation-discussion threshold, while reaffirming that the ultimate decision to graduate is made by the borrowing country.¹⁶ In 2021, Congress enacted legislation that directs U.S. representatives at the IBRD to pursue the expeditious graduation of China from the IBRD (Section 9723 of P.L. 116-283); this provision sunsets after seven years. China has not indicated that it is considering graduation from the World Bank or the AsDB assistance, and it remains eligible to borrow resources.¹⁷ In a May 2026 report to Congress, the Department of State noted that it is working to address China's "inappropriate" designation as a developing country, including through actions to restrict or eliminate China's ability to access international financing to which the United States is a contributor.¹⁸

PRC officials have generally characterized their borrowing from the MDBs as a useful way to adopt project-level standards and gain access to expertise across a range of sectors in support of development goals.¹⁹ Additionally, poverty remains a problem in China; despite rapid economic growth over the past two decades, more than 300 million people in China (roughly one in five people in China) are living on less than $8.30 a day.²⁰ If the MDBs are in a position to help address poverty in China, some policymakers might argue that lending to China is consistent with the economic development mission of these institutions, even if the government could be paying for these efforts.

MDB projects also transfer knowledge and institutional expertise, which China can adopt in development projects it self-finances.²¹ Additionally, while China limits access to information about its economy,²² the multiyear lifecycle of proposing, approving, implementing, and evaluating a MDB project in China may provide insights to other MDB members, including the United States, into China's economy that otherwise would be unavailable.

The World Bank and AsDB earn interest on their loans to developing countries—including China—which they use to pay for administrative expenses.²³ If there is sufficient demand from other development countries for MDB financing, however, the MDBs could pivot away from projects in China and still earn the interest needed to cover their expenses.

China's Representation at the IFIs

Member countries make decisions at the IFIs, including the approval of new projects and major policy changes, by voting. A member's voting share has traditionally reflected the size of its economy. In practice, voting shares at the IFIs have proven difficult to change and are slow to reflect major shifts in the global economy. In 2000, China's economy accounted for 3.6% of global GDP; by 2024, its share had increased about five times to 17.7% (Figure 4).²⁴ China's voting share at the IFIs has not reflected this shift. China's dissatisfaction with its voting share has persisted for years; it is widely credited as a factor motivating China's creation of the AIIB, where China's voting share at 26.4% is the largest of member countries.²⁵

Figure 4. China's Economic Rise and Static Voting Power at the IFIs

Source: Created by CRS using IFI annual reports, financial statements, and websites, and the World Bank's World Development Indicators Database. Notes: China was not a member of the IDB or the EBRD in 2000, and the AIIB was not in existence in 2000. GDP measured in current U.S. dollars.

Voting reforms at the IMF and World Bank following the global financial crisis of 2008-2009, while modest, did result in China becoming the third-largest member by voting share, after the United States and Japan. Even with the reforms, China has the largest difference between its share of global GDP and voting share of any IMF or World Bank member (Figure 5). By this metric, China has been sometimes described as "under-represented" at the IMF and the World Bank.²⁶ The United States is also underrepresented, but this has been by choice: the United States has lowered its voting share over time in order to allow new countries to join, while reducing its financial commitment to the institutions and protecting veto power over major policy decisions.

Figure 5. Member Country Representation at the IMF and World Bank

Source: Created by CRS using World Bank and IMF annual reports and the World Bank's World Development Indicators Database. Notes: GDP data is for 2024 (latest available) and measured in current U.S. dollars. Data on voting shares is from 2025. For this graph, underrepresentation refers to voting share that is less than the share of global GDP. The International Bank for Reconstruction and Development (IBRD) is the World Bank's nonconcessional lending facility.

The IFIs have taken some steps to increase China's representation, including the appointment of more PRC citizens to senior leadership positions. In 2011, the IMF created a new position of Deputy Managing Director, which by custom has been held by a PRC citizen for more than a decade.²⁷ At the World Bank, the position of Managing Director and Chief Administrative Officer has been held by a PRC citizen since 2024. By way of comparison, U.S. citizens have by custom served as the President of the World Bank and the First Deputy Managing Director of the IMF since the institutions were founded. U.S. representatives to the IMF and World Bank Boards of Governors and Boards of Executive Directors are nominated by the President and confirmed by the Senate. As of June 10, 2026, no presidentially nominated and Senate-confirmed officials are serving in these positions. These vacancies are filled by civil servants from the Department of the Treasury in an acting capacity (see text box at the end of this section).

One of the main arguments for increasing China's voting share at the IFIs is promoting the legitimacy of the institutions. Experts have long maintained that the legitimacy of the IFIs is tied to fair representation of member governments, and that the legitimacy of the IFIs is critical to their effectiveness.²⁸ If the IFIs are perceived by developing countries as overly dominated by the United States and/or Western countries, developing countries may be less likely to turn to the IFIs for financial assistance or adopt IFI policy recommendations.²⁹

A second argument for increasing China's voting share is that it creates an opportunity to raise additional funding for the IFIs. Voting reform at the IFIs usually occurs in the context of a decision by the membership to increase IFI resources. China has demonstrated its willingness to increase its financial commitments to the parts of the IFIs where it has been permitted to do so—that is, where higher contributions have minimal or no impact on formal voting power.³⁰ Enabling China to boost its contributions to core IFI resources, thereby increasing China's voting power, could be an opportunity to raise IFI lending capacity.

At the same time, China has engaged in a number of actions at the IFIs that contradict U.S. priorities and interests and may affect institutions' impartiality. Some policymakers may be reluctant to increase China's ability to advance such policies. For example, over the past decade, PRC officials have reportedly pressured employees of the World Bank from Taiwan to obtain PRC passports,³¹ blocked the publication of a World Bank report recommending reform of its state-owned enterprises (SOEs),³² and pressured World Bank officials to improve China's country rating in a key World Bank publication.³³ In 2019, China faced allegations that it improperly used World Bank funding for vocational schools in the Xinjiang Uyghur Autonomous Region to purchase security equipment for Uyghur internment camps.³⁴ In 2023, the AIIB's global communications director, a Canadian citizen, resigned from the AIIB, alleging that the organization is "dominated" by the CPC.³⁵ The Canadian government subsequently announced that it is reviewing its engagement with the AIIB and its participation has been indefinitely suspended.³⁶

Additionally, China has taken unilateral actions that counteract U.S. and MDB priorities.³⁷ For example, China's atypical bilateral lending practices have sought to advantage its loans over multilateral and bilateral creditors through confidentiality clauses and creditor-controlled off-shore collateral accounts.³⁸ PRC creditors have also blocked some debt restructuring efforts for developing countries—with adverse ramifications for both the affected governments and the IFIs.³⁹

U.S. Representatives to the IMF and the World Bank Each IFI has a Board of Governors and a Board of Executive Directors. The Board of Governors is the highest decisionmaking authority of the IFI, and it typically meets once or twice a year. Each country is represented on the Board of Governors; by convention, this representative is usually its finance minister or head of the central bank. The Board of Governors delegates day-to-day authority over operational policy, lending, and other matters to the Board of Directors. There are usually about two dozen Executive Directors, depending on the IFI. The members with the largest voting shares, including the United States, appoint their own Executive Director. Groups of countries elect the other Executive Directors. U.S. Governors, Alternate Governors, Executive Directors, and Alternate Executive Directors to the IFIs are nominated by the President and confirmed by the Senate. As of June 10, 2026, there are no presidentially nominated and Senate-confirmed U.S. representatives to the IMF or the World Bank. For some positions, the President has submitted nominations for Senate consideration; in other instances, the President has not submitted nominees to the Senate. Some positions have not been filled by a presidential appointee in more than a decade (Figure 6). There are also vacancies at the regional MDBs. Treasury civil servants fill vacancies in an acting capacity, but it is not clear they have the same gravitas in international negotiations as confirmed officials. For example, traditionally the President has nominated and the Senate has confirmed the Treasury Secretary as the U.S. Governor to the IMF, the World Bank, and the regional development banks. Figure 6. U.S. Representatives to the IMF and the World Bank Source: Created by CRS using data from http://www.congress.gov, IMF and World Bank annual reports, the Treasury Department, the Federal Reserve, the State Department, and LinkedIn.

PRC Firms and MDB Procurement

The MDBs have procurement processes in which companies from around the world bid on contracts to provide the services, goods, and civil works (infrastructure and engineering projects such as roads, bridges, and water systems) needed to carry out MDB-financed development projects. In recent years, PRC firms won about 20% ($3.9 billion) of the civil works contracts awarded by the MDBs.⁴⁰ The proportion varies across MDBs, ranging from 40% awarded by the AsDB to 4% by the EBRD (Figure 7).

Figure 7. MDB Civil Works Contracts: Awards by Firm Nationality % of contracts (by value)

Source: Created by CRS using MDB procurement data. Notes: 2025 data for the World Bank, the AfDB, and the AsDB; 2024 data for the EBRD, the IDB, and the AIIB (latest available).

One potential concern about the share of MDB civil works contracts awarded to PRC firms relates to MDB procurement policies.⁴¹ While the policies limit the ability of SOEs to bid on contracts in their home country, there are no similar restrictions for SOEs bidding on contracts outside their home country.⁴² SOEs generally have lower costs than private companies due to explicit and/or implicit government subsidies for SOEs. This may raise questions about whether private companies can compete fairly with SOEs when bidding on MDB contracts. This issue is particularly relevant with China, because the PRC companies awarded MDB civil works contracts are generally state-owned enterprises (SOEs).⁴³ In other contexts, including trade negotiations, a U.S. priority has been ensuring that U.S. companies and workers can compete on fair terms with foreign SOEs.⁴⁴

At the same time, there is a potential benefit to awarding MDB contracts to SOEs: cost savings. MDB contracts are awarded through an international competitive bidding process. To the extent that SOEs have lower production costs due to government subsidies, MDB projects are less expensive than they would otherwise be. All else equal, this is a direct benefit to the borrowing country and allows MDBs to finance more projects with the same lending capacity.

A second concern could include the number of PRC firms and individuals that have been found to have engaged in fraud, corruption, or similar activities in MDB contracts. In such instances, the companies and individuals are ineligible to bid on MDB-financed contracts indefinitely or over a finite time period, depending on the infraction. As of June 8, 2026, the World Bank has debarred more than 1,460 companies and individuals, of which 381 (26%) were from the PRC, followed by Vietnam (4.7%) and Nigeria (3.8%).⁴⁵

For example, the World Bank debarred Xinjiang Xiaohaizi Water Conservancy Construction and Installation Engineering Co. in April 2025 for 15 months, because the company failed to obtain the requisite prior approval to subcontract a substantial part of its contract to a third party.⁴⁶ That same month, the World Bank also debarred Guangdong Dianbai Second Construction Group Co. for 18 months, because the company failed to provide requested materials to the World Bank about the project, thereby impeding the Bank's audit rights.⁴⁷ In October 2025, the AfDB debarred Hangzhou Fuchuan Electric Equipment Co. for 36 months for preparing falsified manufacturers' authorizations during the tender process.⁴⁸

The relatively high number of PRC-firm debarments might reflect the high volume of MDB projects carried out by PRC firms. Additionally, it might reflect common corporate structures in China. PRC companies have extensive affiliate and subsidiary networks, and the debarment list includes entities that are controlled by debarred firms as separate line items. At the same time, the number of cases may raise concerns about awarding MDB contracts to firms from a country where many firms have previously been found to violate MDB procurement policies.

Selected Policy Options for Congress

Congress has a number of tools for shaping U.S. policy at the IFIs, should it choose to do so. Examples include hearings with administration officials and policy experts, letters to key Treasury Department and IFI officials, legislation requiring reports from the administration on IFI policies and congressional priorities, legislation that directs U.S. representatives to the IFIs to advocate and vote for or against specific policy issues (called "voice and vote" mandates), and increasing or decreasing authorizations of appropriations for U.S. financial contributions to the IFIs.

Regarding China's role in the IFIs, Congress has taken a number of actions in recent years. For example, Congress has directed U.S. representatives to the World Bank to advocate for the graduation of China from World Bank financial assistance.⁴⁹ During the 119^th Congress, congressional committees have collected testimony from policy experts and the Administration about China's role in the IFIs,⁵⁰ and during the 118^th Congress, Members wrote letters to Biden Administration officials urging stronger action to ensure that China adheres to its responsibilities under IFI agreements.⁵¹

In the 119^th Congress, some Members of Congress have introduced legislation that would, for example, direct U.S. representatives at the MDBs to oppose financial assistance to China (S. 2362); direct U.S. representatives at the IDB to reduce the influence of China in the IDB's operations, activities, and projects (S. 2626); and direct U.S. representatives at the MDBs to push for greater transparency about MDB contracts awarded to SOEs (Section 217 of H.R. 3224).

If Members of Congress want to consider additional actions for shaping U.S. policy toward China at the IFIs, some options, focused on MDB lending to China, China's representation at the IFIs, and PRC-firms implementing MDB-funded projects in developing countries, are listed below:

MDB Loans to China

• Direct the Treasury Department to prepare a report assessing the potential implications of China's graduation from the MDBs, including for MDB revenue and the availability of financing for other developing countries.
• Direct the Treasury Department to assess the feasibility of new mechanisms by which the MDBs could provide policy advice on and oversight of member-funded development projects.
• During confirmation hearings for U.S. representatives to the IFIs, ask nominees about their views on MDB financing to China.
• Convene a hearing with policy experts and stakeholders (such as the business community and civil society groups) to assess the potential economic and political implications of China's graduation from MDB financial assistance.
• Condition new U.S. contributions to IFIs on China's graduation from MDB financial assistance.

China's Representation at the IFIs

• Convene a hearing with policy experts and stakeholder groups about the implications of the current governance structures at the IFIs, particularly relating to the effectiveness of the IFIs.
• Through letters or hearings, ask Treasury officials to clarify the current administration's position on the current status of IFI governance structures.
• Direct U.S. representatives to the IFIs to oppose or support efforts to realign voting shares at the IFIs.
• Establish benchmarks that China would need to meet in order for the United States to support a realignment of IFI voting shares.
• Require the Treasury Department to prepare an assessment of China's influence at the IFIs.
• Fill vacancies for U.S. representatives to the IFIs. Congress could, for example, request updates on the current administration's timeframe for submitting nominations for these positions and facilitate expeditious consideration of IFI nominations, and/or amend U.S. law to eliminate separate confirmation processes for the Treasury Secretary to serve as U.S. Governor to the IFIs, the Chairman of the Federal Reserve to serve as the Alternate Governor to the IMF, and the Under Secretary of Economic Affairs to serve as the Alternate Governor to the MDBs

MDB Procurement Policies regarding State-Owned Enterprises

• Direct the Treasury Department to assess the economic implications of MDB procurement policies regarding SOEs.
• Solicit feedback (e.g., through direct outreach, letters, and/or hearings) from the U.S. business community and civil society groups on the implications of MDB procurement policies for U.S. companies, U.S. workers, and developing countries.
• Direct U.S. representatives to the MDBs to request an independent evaluation of contracts fulfilled by SOEs.
• Condition new U.S. funding for the MDBs on the reform of MDB procurement policies regarding SOEs.
• Direct the U.S. representatives to the MDBs to use their "voice and vote" to advocate for an assessment of MDB anti-corruption policies and reform options.
• Increase funding, or direct the Commerce Department to devote more personnel, to MDB Liaison Offices, which advise U.S. companies on how to work with the MDBs and seek to increase the proportion of MDB projects won by U.S. firms.⁵²

Other

• Request an assessment from the Treasury Department on the possible benefits and drawbacks of IFI financing relative to PRC financing, and reforms that could improve the competitiveness of IFI financing while maintaining environmental, labor, and procurement standards.
• Direct U.S. representatives at the IFIs to use their voice and vote to request an analysis of IFI co-financing arrangements with the AIIB and/or China.

Footnotes