According to an independent review revealed on Thursday, World Bank management, including the then-Chief Executive Kristalina Georgieva, put "undue pressure" on staff to improve China's rating in the bank's "Doing Business 2018" report.
The report, created at the request of the World Bank's ethics committee by law firm WilmerHale, raises questions about China's influence at the bank, as well as Georgieva's – now managing director of the International Monetary Fund – and then-World Bank President Jim Yong Kim's judgement.
Georgieva said she disagreed "fundamentally with the findings and interpretations" of the report and had briefed the IMF's executive board.
The World Bank Group cancelled the whole "Doing Business" report on business climates on Thursday, citing "ethical problems, including the conduct of past Board leaders, as well as current and/or former Bank staff," citing internal audits and the WilmerHale inquiry.
The US Treasury Department, which oversees the US's majority stakes in the IMF and the World Bank, said it was reviewing the "serious findings."
According to the WilmerHale report, senior personnel in Kim's office exerted "direct and indirect pressure" to adjust the report's methodology in order to improve China's score, and this was most certainly done at his direction.
It said Georgieva and a key adviser, Simeon Djankov, pressed staff to "make precise adjustments to China's datapoints" in order to improve the bank's rating at a time when the bank was seeking China's backing for a large capital expansion.
China advanced seven places to 78th place in the "Doing Business 2018" report, issued in October 2017, after data methodology improvements were made, compared to the initial draught report. The "Doing Business" report rates countries based on their regulatory and legal systems, ease of starting a business, financing, infrastructure, and other factors that influence the business climate.
The report comes roughly two years after Georgieva took over as IMF chief, just before the Fund's 76-year history was rocked by the COVID-19 epidemic, which sparked the largest global economic crisis in its history.
The WilmerHale report also cited pressures related to data used to determine rankings for Saudi Arabia, the United Arab Emirates, and Azerbaijan in the 2019 World Bank "Doing Business 2020" report, but found no evidence that any members of the World Bank's Office of the President or executive board were involved in these changes.
In the "Doing Business 2020" report, Saudi Arabia advanced 30 positions to 62nd place. "Going forward, we will be working on a new approach to assessing the business and investment climate," the World Bank said.
According to Reuters, the report said the push to boost China's ranking came at a time when the bank's management was "consumed with sensitive negotiations" over a major capital increase, and China's disappointment over a lower-than-expected score.