Photo by Standard Chartered Bank China
An adventurous life in treasury
James Zhixin Zhang, Head of Treasury and Corporate Finance, Asia Pacific and China at Siemens Energy, has embraced opportunities and challenges throughout his career – travelling the globe and honing his treasury skills in the process – and has learned a number of lessons along the way, which led to a career highlight of establishing and leading Siemens Energy’s regional treasury in Asia Pacific and China.
James Zhixin Zhang
Head of Treasury and Corporate Finance, Asia Pacific and China
Siemens Energy is one of the world’s leading energy technology companies. The company works with its customers and partners on energy systems for the future, thus supporting the transition to a more sustainable world. With its portfolio of products, solutions and services, Siemens Energy covers almost the entire energy value chain – from power generation and transmission to storage. The portfolio includes conventional and renewable energy technology, such as gas and steam turbines, hybrid power plants operated with hydrogen, and power generators and transformers. More than 50% of the portfolio has already been decarbonised.
Zhang, Head of Treasury and Corporate Finance, Asia Pacific and China, Siemens Energy, has had an adventurous life in treasury that has seen him take up new challenges all around the world.
After graduating from university, Zhang began his career as a consultant at Capgemini. His first client was ABB, a fortuitous encounter that ended up shaping his career in many ways. His career moved into its second phase when he began to work for ABB in 2012. Working for the Swiss and Swedish multinational industrial company opened up a new world and shaped the career in treasury for him.
He started out with ABB China, as a treasury manager and team leader, and from there he had numerous international assignments. After three years in this role, he got his first international assignment, at the ABB headquarters in Zurich, Switzerland. “This gave me a holistic view of the whole of global treasury management, including capital markets.”
This assignment, however, was cut short when he had to return to China for a new opportunity. He didn’t hesitate to take on the new challenge and became the ad-interim country treasurer for China and Hong Kong. Here he got to take on new responsibilities in leading the treasury function.
When that temporary role came to an end, he was soon packing his bags and leaving on a plane for a different far-flung destination. This time it was an exciting opportunity in Dubai, UAE. For six months he was the treasury manager for the Asia, Middle East and Africa region and got to experience the various cultures in the diverse region and work with colleagues from numerous countries.
While in the UAE, Zhang’s responsibility was on the strategic side of treasury to restructure the treasury functions in 18 countries into six centres of excellence (CoE) in the region. This experience exposed him to the intricacies and complexities of working in a region that is diverse, with each of the markets with their unique set of rules and regulations. He continued his work in China after the completion of the assignment in UAE and had the opportunity to briefly work in South Korea for one month.
He eventually relocated back to UAE as the cluster treasurer for the Middle East. During this time at ABB it appears he was yo-yoing between China and the international assignments. It sounds like an exciting time, but was this the kind of life he chose, or was he told to go on these assignments?
This was an active choice, he explains. “I saw it as an opportunity, it was an enriching experience; when you are presented with opportunities like this it is up to you to choose,” he says. And he certainly chose the adventurous and interesting life during his time at ABB.
So far in his career, Zhang has consciously taken up new challenges and developed his professional skills at the same time. “In my career I have enjoyed travelling and going to different countries – it has shaped how I think and behave. I think I became more direct and outspoken as a result of these international assignments – not like when I first joined treasury. This experience has really shaped me as a person,” he says.
Zhang remembers his time at ABB fondly and says, “I really grew up there, and really transformed into a seasoned regional treasury head over those six years,” he says.
From there, he returned to China – in 2018 and took a job with Siemens, the German multinational industrial conglomerate. As the Head of Global Markets for Siemens Financial Services Ltd., a treasury entity and licensed non-bank financial institution in China, Zhang oversaw front office departments including Bank Relations, Business Development and Financial Markets. The uniqueness of Siemens’ treasury set-up is that the Financial Markets department can pool the liquidity and foreign exchange (FX) risks from dozens of Siemens companies and manage these risks in the interbank markets under treasury entity’s umbrella.
He explains how Siemens has a different treasury set-up to other companies and has a regional in-house bank. “Other companies do not tend to have an in-house bank in the region,” explains Zhang. “This makes a difference with how you manage cash and liquidity – it is more centralised,” he explains.
It was an interesting time to join the company, as it was going through some major changes that presented Zhang with a new set of challenges and opportunities. Siemens was undergoing a restructuring under its Vision 2020+ strategy, which gave individual businesses under the Siemens umbrella more entrepreneurial freedom in order for them to sharpen their focus on their respective markets. As part of this plan, in May 2019, Siemens announced that it would be creating a new player in the energy market with the combination of its majority stake in Siemens Gamesa Renewable Energy and the spinoff of Siemens’ Gas and Power, which comprised the company’s oil and gas, conventional power generation, power transmission and related services businesses.
This new company was named Siemens Energy and the spinoff was approved by Siemens shareholders in July 2020. Siemens Energy AG officially became an independent entity when it listed on the Frankfurt Stock Exchange on 28th September 2020. This marked the beginning of a new chapter, and the company was able to become a leader in energy technology and a Fortune Global 500 company in its own right. According to the company, approximately one-sixth of the electricity generated worldwide is based on technologies from Siemens Energy. And in the fiscal year 2021, Siemens Energy had generated revenue of €28.5bn, and had approximately 91,000 employees worldwide in more than 90 countries.
The spinoff was not without its challenges for those in the treasury team, however. The restructuring meant that the treasury infrastructure and team for Siemens Energy was being built almost from scratch, and this involved also building the regional treasury team, which Zhang has led.
Creating a standalone treasury set-up for a company of Siemens Energy’s scale is like complex surgery, says Zhang. There were many inter-dependencies and uncertainties. And the timeline of Siemens Energy spinoff and listing was tight. Many of the activities had to be completed between late 2019 and early 2020 to hit milestones toward the successful listing of the company. During this time, most countries were impacted by COVID-19 and were in different stages of lockdown, which made everything more difficult, explains Zhang.
Steering through all these complexities and uncertainties in such a short time required swift decision-making, a strong acumen of treasury management and close collaboration with many stakeholders around the world, Zhang explains. Extraordinary teamwork, together with his international experience, played an important role in successfully achieving the treasury function readiness during the spinoff.
In my career I have enjoyed travelling and going to different countries – it has shaped how I think and behave.
Since the spinoff he has created the entire treasury and corporate finance team for China and the Asia Pacific region. This was quite a unique position to be in: he had a blank canvas to create things how he wanted, but there were also the traditions of Siemens to consider and how things had previously been run. “On the one hand we came from the Siemens legacy where there is an inherent best practice with highly-motivated and experienced people – something that we are proud of. At the same time, Siemens Energy is a young company that is relatively new in the capital markets. There are a lot of things to think about strategically and how we want to set up in the future,” he explains.
Also, there are unique aspects of being in China and Asia Pacific, which is a diverse and dynamic region. In the region, Siemens Energy has business operations in at least 15 countries. All these countries have their own regulations and some of them, such as China and India, have relatively more complex regulatory environment.
In setting up the regional treasury, Zhang explains, he has had to find the best balance between being centralised and decentralised, between hardwiring the processes into the system and maintaining the flexibility, and balancing out where there might be a conflict in objectives between the two. There needs to be a balance between being focused on the local needs and having the flexibility to adapt to them, but also the economies of scale that come with operating at a regional level. The latter is needed because people are needed centrally, for example, to manage the cash pool and execute high volume FX and guarantee transactions in the region. However, local specialities, such as guarantees in Korean or Thai language, must be managed locally.
In Siemens Energy, the entire Asia Pacific and China regional treasury is managed by one centralised team located in two countries to run end-to-end processes, plus two satellite countries whose treasury is managed locally. This set-up is tailored to consider both the business needs and the synergy through centralisation.
How to structure the regional treasury also requires a long-term mindset, Zhang says, and the treasury leadership need to keep an eye on what is happening in the world and what might happen in the future. In all of this, Zhang explains, there is a conflict that needs to be balanced – between whether to centralise or decentralise.
This is his latest challenge in what has been an exciting and fulfilling career so far. Does he like his current role? “I really like it!” he says, explaining that it has been enjoyable to start building an entire team from scratch and create the treasury infrastructure for the new spinoff company like an architect.
Another factor that is unique in working for a company like Siemens Energy is that the treasury function has a wide range of mandates that encompass not only the core cash management, funding and FX risk management, but also topics such as trade finance, working capital management and customer finance. Being a regional treasurer allows one to take a generalist approach, which contracts to the more specialised set-up in the headquarters treasury function.
The company has a really diverse business model with a mixture of product, project and service businesses, explains Zhang, and some of the service contracts can be for 20 to 30 years, which creates unique considerations for FX risk as hedging of this long duration isn’t generally available. This usually requires the expertise to structure the solution based on the understanding of business model and knowledge of the local regulations and financial markets.
Zhang also explains how he has enjoyed and gained deep satisfaction from seeing how his team has developed, and how they have developed their knowledge and understanding of treasury. “In the beginning the team in China did not know much about Asia Pacific, and it has been great to see how they have grown,” he says. Also there have been specialists in trade finance, for example, who have expanded their skillset to know more about treasury, and also about the complexities of operating in the region beyond their home market.
The team needs to develop a broad range of skills to cover the various aspects of treasury management. Zhang explains: “With FX you need to be sensitive to numbers and change, whereas on the trade finance side you are dealing with a lot of text. In the documents for bank guarantees, for example, there is a lot of writing and various terms and conditions. You need to be sensitive to text – the way I look at it is that one is dealing with natural science and the other is social science. In my function you have to manage both.”
Through his career, Zhang has noticed a number of trends. He has witnessed and experienced the trend of treasury having to adapt to the merger and acquisitions of the major parent companies, as well as spinoffs. This is where treasury attracts high attention from the C-suite and has a key role to play, not just in the financing side but in building the basics of managing the cash and market risk and securing credit facilities. This has to be done at the same time as keeping the company running, like building the engine while the car is running.
Many companies have been undergoing a similar corporate restructuring, and Zhang says that in this environment you need to consider how to set up your lean function, and how to be efficient. “The best practice is to follow the strategy of the company. If the strategy of the company is moving to be centralised, then you have to be centralised. If the company wants flexibility – then you have to do that too in treasury. It really depends on the strategy of the company,” he says. Zhang adds, “When you look at treasury, you should not look at it in isolation – you need to look at the broader strategy, and the entire environment.”
And looking to the future, Zhang comments on the trend of automation and digitisation and efficiencies with gaining better visibility. “These trends will continue into the future,” he says, “but at the same time I think it is important for treasury to be more strategic, to think ahead, to think more broadly and not be reactive.”