By Kelvin Soh and Terril Yue Jones
HONG KONG/BEIJING, Oct 17 (Reuters) - The chairman of the world's most valuable bank was once a good communist, learning from the peasants in a collectivist commune in Jiangxi province and working to raise coal production as a teenage miner in Henan during the tumult of Mao Zedong's Cultural Revolution.
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Today, Jiang Jianqing has a somewhat bigger job: running the world's biggest bank, Industrial and Commercial Bank of China.
But he does the work for an annual salary that might make a hardened socialist nod with approval. He earned $150,000 in 2010, a mere 1.5 percent of Bank of America Corp CEO Brian Moynihan's estimated $10 million pay last year, and half again smaller than the $20 million Jamie Dimon was paid for running JP Morgan.
Like those of his peers at other Chinese banks, Jiang's salary has consistently fallen in the past four years, from about $240,000 in 2008, and he himself said in Hong Kong last year that he hoped his pay cheque would stop shrinking.
"We can't be paid more than the regulators who oversee us," Jiang explained last year when asked about the matter. "If the regulators have to take a pay cut, we will take a pay cut as well."
China's "Big Four" lenders are back in the spotlight as China's economy starts to absorb the impact of a global slowdown.
Last week Central Huijin, a unit of the $400 billion sovereign wealth fund China Investment Corp, began buying shares in the banks -- ICBC, China Construction Bank, Agricultural Bank of China and Bank of China -- to prop up their share prices and reassure domestic investors.
As Jiang's example shows, China's top bank bosses are a different breed to their Western counterparts. Beneath their coiffured hair and tailored suits, the likes of CCB Chairman Guo Shuqing and ICBC's Jiang are first and foremost Communist Party members appointed to their jobs by the government.
As China prepares for a 2012 leadership transition that will see the retirement of Hu and Premier Wen Jiabao from their party posts, many of the bankers will also see themselves rotated into new jobs.
The Party connections of the Big Four executives raise questions about who, exactly, they work for.
"Who are you trying to impress? You're not trying to impress your shareholders, you're trying to impress party seniors," says Patrick Chovanec, associate professor at Tsinghua University's School of Economics and Management in Beijing.
"After you complete your tour at a bank, you will be assigned to a new tour of duty, usually in a government posting."
That bureaucratic outlook has been fully apparent in the banks' actions over the years. Directed by the state to funnel money into government-linked companies, banks were saddled with non-performing loan ratios exceeding 20 percent by the early 2000s.
Beijing bought out most of those bad loans as the banks prepared for their public listings. They have kept a fairly clean record since, but many, including Credit Suisse and Fitch Ratings, warn that bad loans may soon start creeping up again.
Credit Suisse analyst Sanjay Jain said in a report on Wednesday he now thinks that up to 12 percent of all of China's outstanding loans may go bad and non-performing loans may likely account for all of the banks' equity. Current NPL ratios hover at around 1 percent for the top Chinese banks.
This comes after banks went on a lending spree during the global financial crisis in 2008 and 2009, spurred on by Beijing's 4 trillion yuan ($627 billion) call to boost the economy.
Much of that money went to the railway ministry, local governments that set up financing vehicles to fund their pet projects and real estate developers.
All three are in potential trouble now, with the China's railway ministry under public pressure after a high profile train crash, local governments largely barred from borrowing from banks and property prices in danger of collapsing.
Despite all that, banks have reported strong earnings in the past year that often beat expectations. This may be a result of them putting less cash into the kitty to prepare for loans that may go sour.
"This is unlike the late 1990s when the government forced the banks to admit to a huge amount of non-performing loans. This time round, the strategy is just to not admit to NPLs," said Victor Shih, a professor at Northwestern University in Chicago who has written a book on China's financial system.
Many of the executives running China's banks may have accepted salaries their Western counterparts would disdain in return for the future political appointments that may further their influence, said Northwestern's Shih.
"Many of them are aspiring politicians, and being a bank CEO is merely a stepping stone in their careers," Shih said. "Thus, they are willing to accept lower pay."
Guo Shuqing, chairman of the world's No.2 lender China Construction Bank, is a philosophy graduate who completed his Master's degree in the 1980s in one of the more fashionable areas of study at that time: Marxist and Leninist theory.
Many of these executives were given their jobs after political appointments -- Guo in Guizhou and Bank of China Vice Chairman Li Lihui who was vice-governor of the southern island province of Hainan.
Others also had regulatory roles, with AgBank's low-profile Chairman Xiang Junbo having once worked at the National Audit Office and Bank of China's Li at a local branch of the country's central bank.
The irony is not lost on China-watchers, some of whom say that for all of China's claims of being a market-oriented economy, many of its biggest companies retain strong relationships with the government.
"It's all decided by the personnel department of the Communist Party," said Tsinghua's Chovanec.
"These postings should be seen as precisely that, they are postings to give them experience and put them in management roles," he said. "These are not traditional banking paths."
And unlike most other executives where job-hopping between companies is common, few top Chinese executives have ever made the jump from the world of state-backed lending to foreign-run banks or financial services companies, despite the promise of higher salaries.
"It could make a lot of sense if knows the American system," said a former senior Chinese banker who knows CCB's Guo personally.
"But I think when you're that high in the system and then have to work for a foreigner -- I don't think China's ready for that kind of switch yet."
(Editing by Don Durfee and Alex Richardson)