Lili Zheng 郑莉莉 is the first woman from mainland China to become a partner at Deloitte, one of the “Big Four” global accounting firms. She has worked in international tax planning for over 25 years in San Francisco, Tokyo, Beijing, Silicon Valley, Hong Kong, and New York. She now leads the firm’s U.S. Chinese Services Group, is responsible for managing the firm’s work for Chinese clients investing in the U.S., and advises multinational corporations on their investments in China.
Zheng was one of the technology panelists at our second annual Women’s Conference: How Women Are Shaping the Rising Global Power, on May 14. Prior to the event, she talked to SupChina about her time in Silicon Valley, where she worked closely with a group of Chinese entrepreneurs, and her experience of being an Asian woman in the white, male-dominated financial services industry.
SupChina: China has reportedly been tightening its control over cross-border capital flows. What impact did the policy make on Chinese investors setting foot in the U.S.? Has the momentum of Chinese investment been significantly curbed? If so, in your opinion, how soon will it pick up again?
Zheng: China’s change in policy by increasing restrictions on outbound investment from state-owned enterprises and limitations on highly leveraged capital outflows by private investors for overseas projects has been a factor in the significant drop in Chinese investment in the U.S. Chinese FDI in the U.S. fell from the high-water mark of $46 billion in 2016 to $29 billion in 2017, reflecting a decrease of about 36 percent, according to the Rhodium Group. The new policies effectively limit investments in real estate, entertainment, hospitality, and related sectors, but continue to encourage outbound investments in other economy sectors such as technology, healthcare, biotech, and pharmaceuticals, as well as projects falling within the strategic Belt and Road Initiative. Despite the emphasis on the high-tech sectors by the Chinese government, the Committee on Foreign Investment in the United States (CFIUS) has increased scrutiny of investments in areas seen as having potential national security ramifications, which has impacted the decrease in acquisition transactions in the U.S.
While the political environment is uncertain, trade and commerce between the world’s two largest economies should continue. Though the volume and size of the current investments are smaller from China, many private investors and strategic investors are actively looking to invest in areas with synergy to grow. I hope the business fundamentals would prevail and some of the current frictions in the economic relationship could be addressed through bilateral trade and policy discussions.
SupChina: During your 20-plus years working in Deloitte San Francisco and San Jose, you have been actively involved in the Hua Yuan Science and Technology Association (HYSTA) in Silicon Valley and have served on the board of directors of HYSTA since 2010. Can you tell us a bit more about HYSTA and why you were involved? Could you share with us some of the most memorable experiences of working with HYSTA in connecting entrepreneurs between the U.S. and China?
Zheng: HYSTA is a nonprofit professional organization whose goal is to help in bridging the U.S. and China to promote entrepreneurship, leadership, and technical collaboration. It was established in 1999 by a group of Chinese entrepreneurs in Silicon Valley, many of whom are today leading figures in China’s high-tech fields. From its beginning as a networking forum for entrepreneurs, HYSTA has evolved and grown to include over 20,000 members in Silicon Valley and around the globe. In close partnership with universities, corporations, startups, and diverse business organizations, HYSTA strives to unite its members to help enhance their leadership and career development.
I became involved in HYSTA as I had also caught the Silicon Valley entrepreneurial bug even as a CPA working at Deloitte. I found working with this group of entrepreneurs exciting and challenging. I was able to adapt and challenge myself to add value by creating solutions that could address issues common to startup companies and their investors from accounting and tax perspectives. My ability to communicate in ways understandable to this group helped enable me to play an important role in the ecosystem. I am fortunate to have the opportunity to serve on the HYSTA board together with 16 other PE/VC investors and entrepreneurs in Silicon Valley and China.
My most memorable experience has to be the 2005 HYSTA Annual Conference in Pebble Beach whereby a side discussion during the golf game led to the $1 billion JV between Jack Ma (founder of Alibaba) and Jerry Yang (co-founder of Yahoo). HYSTA’s goal is to bring together influential U.S.-China business leaders and it has witnessed the official launch of Sequoia China, the founding of Northern Light Venture Capital, the discovery of a rising startup that later became famous as Baidu, and many more.
SupChina: You emigrated with your family from China in 1982 and have been spending your time between China and the U.S. Did you notice any difference in terms of investment preference or business practice between these two countries?
Zheng: While I was “made in China,” I immigrated to the U.S. when I was young. I am fluent in Mandarin and Cantonese, and used to travel to China on business six to eight times a year, so I was already regarded as a China expert by some colleagues. When I later moved to Hong Kong and China, however, I realized firsthand how much I still needed to learn. After about 7.5 years living there, I finally felt I had gained significant knowledge from the immersion experience.
With the speed of change in both China and the U.S., in my opinion, it is notable that the differences in investment preference are often driven by cultural factors. Many of the Chinese investors prefer acquisition of hard assets such as real estate, mines, and manufacturing facilities, etc., and are generally less focused on investment in securities, derivatives, or other financial products. The investment practice is also very different. Chinese investors tend to spend a lot of time renegotiating contracts that may be viewed as finalized by the U.S. counterpart. The overall time required to finish an investment deal could be a lot longer due to various levels of approval required in China, including foreign exchange control-related issues.
SupChina: We all know that the investment industry is largely male-dominated. There are few women in senior positions in prestigious firms. As an Asian woman, what challenges did you face in your career? How did you overcome them? Regarding gender equality, what are some changes you’d like to see at Deloitte and in the industry?
Zheng: There were a number of challenges for me being an Asian woman professional who was not born in the U.S. For me, these included the ability to speak English fluently, to understand both the culture in the U.S. and Corporate America, learning how to lead authentically, and also how to stand up and make my voice heard. The quiet and reserved nature of many Asian women can sometimes understate their achievements and talent in Corporate America. While hard work can enable one to reach a manager level, to succeed at the higher career levels, I believe one needs to possess leadership skills. Fortunately, at Deloitte, talent development goes beyond building skills. It’s about preparing people for the next phase of their careers. We offer a variety of leadership development programs at each level — for example, the Emerging Leaders Development Program (ELDP) for minorities, the Ellen Gabriel Fellows named after our first women’s initiative leader, and Women’s Leadership Programs.
With progress made over the years, the commitment to diversity and inclusion has become deeply embedded in our culture. Deloitte is a perennial on a number of Best Places to Work lists, including Best Companies for Multicultural Women, Working Mother’s 100 Best Companies, and NAFE (National Association for Female Executives) Top Companies. Upon being elected CEO of Deloitte in 2015, Cathy Engelbert became the first female CEO of a major U.S. professional services firm. Other examples of influential women leaders in the U.S. today include Janet Foutty, chairman and CEO of Deloitte Consulting LLP, Janet Moran, Global Tax leader for the Technology, Media & Telecommunications (TMT) practice, Heather Rangel, Technology sector leader for Deloitte Tax LLP, and Sandy Shirai, an M&A principal in Deloitte Consulting LLP who leads our U.S. TMT practice. While we have made great strides, we are humbled by the progress that still needs to be made as we continue to grow and innovate as a diverse and inclusive firm.
SupChina: You are the co-chair and founding member of the Women-In-Leadership HK-PRD Chapter, a nonprofit organization with a goal to connect women investors and entrepreneurs to invest in China. Besides that, you have spent a decent amount of time promoting female leadership through various activities. As the first mainland Chinese woman partner at Deloitte, do you have any advice for aspiring female leaders?
Zheng: I co-founded the WIL HK-PRD Chapter having perceived a need for female entrepreneurs in the Pearl River Delta region to be connected to financial expertise and resources in Hong Kong. Through this effort, I was able to help provide a platform to connect and promote women. With the design and contribution to various programs, I also had an opportunity to be a female role model, coach, and mentor. I believe paying it forward can make us better and stronger collectively and as individuals.
My advice would be to build a team that supports and advocates for you. Be fearless, take risks, and share your own insights as you learn and grow. Leverage internal and external resources to expand your support network. I benefited from my own involvement internally in Deloitte’s Asian-American & Allies Business Resource Group (ABRG), and externally in Ascend, the nonprofit professional association that supports the leadership potential of Pan-Asians in global companies. An achievement that I am particularly proud of is that Deloitte China was recognized as the Best Company for Women by the American Chamber of Commerce in Hong Kong in its 2017 Women of Influence awards. On a personal level, that was the best contribution that I was able to make, coming shortly before my own repatriation to the U.S., and a deeply meaningful experience.