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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.

PARTY JOBS

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.

China's biggest financial institutions fall under the supervision of the Communist Party, so the bank heads also sit on the party's Central Committee that is ultimately headed by the country's President Hu Jintao.

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.

LENDING SPREE

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.

RED BUSINESSMEN

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.

For example, the current governor of the Chinese central bank, Zhou Xiaochuan, and Vice Premier Wang Qishan were both previously head of CCB, the country's No.2 lender.

ICBC's Jiang is rumoured to be in the running to head China's bank regulatory commission, while CCB's Guo is tipped as possibly the next head of the central bank, of which he was previously a vice governor.

"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.

His career path typifies the circuitous route of the senior Chinese bureaucrat/businessman -- he was previously vice-governor of Guizhou province, head of Central Huijin, director of the State Administration on Foreign Exchange and a deputy governor of the central bank before being named head of CCB.

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)

The cash and stock deal announced on Sunday values El Paso at a 37 percent premium to its Friday market value, and comes as Exxon Mobil Corp and other oil majors are spending billions of dollars to develop and produce shale gas and crude oil in areas with poor infrastructure.

The combined El Paso and Kinder Morgan would own about 80,000 miles of pipe stretching from coast to coast, and could demand higher transport fees from oil and gas producers, which could then raise the prices that power companies and other end users pay for gas.

"Now that KMP is by far the biggest pipeline distributor of natural gas, that will also give them pricing power over the market, which could lead to price pressure to the upside for natural gas," said Chris Jarvis, president and founder of Caprock Risk Management in Rye, New Hampshire.

"We expect this to have a positive impact on the natural gas markets, likely setting the stage for addition mergers and acquisitions in the space."

It was not immediately clear how regulators would view the deal. Kinder Morgan said it expected the deal to close in early 2012.

Despite weak natural gas prices, production of the fuel has been rising as energy companies pile into shale fields -- underground formations rich in oil and gas. In the Eagle Ford Shale in South Texas, where there are scant pipelines, companies are having to rely on trucks and are building rail terminals to handle the vast field's output.

El Paso already owned the largest natural gas pipeline system in North America, with more than 43,000 miles of pipe. The combined company would own 67,000 miles of natural gas pipe and another 13,000 miles of pipelines to move refined products and other fuels.

"We believe that natural gas is going to play an increasingly integral role in North America," Kinder Morgan Chief Executive Richard Kinder said in a statement. "We are delighted to be able to significantly expand our natural gas transportation footprint at a time when it seems likely that domestic natural gas supply and demand will grow at attractive rates for years to come."

Kinder Morgan went public in February after CEO Kinder and private equite partners including Carlyle Group and Goldman Sachs Inc's buyout arm Highstar Capital and Riverstone Holdings took the company private in a management led buyout in 2007.

The private equity firms sold a 13.5 percent stake in the company's IPO, but Kinder and the buyout funds still hold a vast majority of the company.

SPLIT-UP DERAILED

The deal derails El Paso's plan, announced in May, to split into two publicly traded companies, which would have separated its exploration and production business from its pipeline operations. Kinder Morgan said it plans to sell El Paso's exploration and production assets.

The $26.87 per share offer consists of $14.65 in cash, 0.4187 Kinder Morgan shares -- valued at $11.26 per EP share -- and 0.640 Kinder Morgan warrants -- valued at $0.96 per EP share -- based on Kinder Morgan's closing price on Friday.

The warrants will have an exercise price of $40 and a five-year term.

Including El Paso's debt, the deal tops $38 billion, making it the second biggest merger in 2011 behind AT&T Inc's $39 billion deal to buy Deutsche Telekom's T-Mobile USA, according to Thomson Reuters data.

Kinder Morgan said it has a commitment letter from Barclays Capital underwriting the $11.5 billion in cash required for the transaction.

The deal also highlights the advantages that energy infrastructure companies have gained in recent years by using a financial structure known as master limited partnerships (MLPs), which pay no corporate taxes but distribute the lion's share of their profits to invsetors and the general partner through dividends.

Companies like Kinder Morgan -- which owns nearly all of its assets through its MLP, Kinder Morgan Energy Partners -- have a tax advantage over their competitors and have also received higher valuations from investors.

This gives it a financial leg up over a company like El Paso, which still holds a substantial amount of its assets outside of its MLP, El Paso Pipeline Partners.

Tudor Pickering analyst Brad Olsen said that the takeover mirrors Energy Transfer Equity's more than $5 billion deal for pipeline company Southern Union.

"It's not a coincidence at all that the two big pipeline deals done this year have been by big MLPs with decelerating growth. Their general partners have gone out and snagged undervalued pipeline assets," Olsen said.

Moreover, Kinder Morgan said it plans to pay down much of the substantial amount of debt it is picking up from the takeover by selling off El Paso's assets to its MLPs.

The new company hopes to generate $350 million a year in cost savings, or about 5 percent of the combined companies' earnings before interest taxes, depreciation and amortization. Kinder Morgan expects to be able to increase its dividend after the deal closes due to these savings.

It said that if the deal were to close at the beginning of 2012, it would expect to be able to pay a dividend of about $1.45 a share that year. But because it expects the deal to close later, it said its dividend will likely be slightly below that target.

Evercore Partners and Barclays Capital advised Kinder Morgan on the deal, while Morgan Stanley advised El Paso. Goldman Sachs acted as an adviser to El Paso on its previously announced spin-off and related matters to the Kinder Morgan deal, the companies said.

The advisors are set to rake in a total of $100 million to $145 million in M&A fees, according to Freeman & Co.

After the steepest two-week rally in more than two years, the S&P 500 is at the top end of its range for the past two months.

The benchmark closed Friday above 1,220 for the first time since early August, and bets against the recent rally could start to pile up.

But Monday earnings and guidance from IBM (IBM.N), followed by results from Apple (AAPL.O), Coca-Cola (KO.N) and Intel (INTC.O) on Tuesday could give shorts a reason to put their guns down. The S&P could be on its way to a third straight winning week --a streak not seen since February.

"There are some fundamental catalysts which could play right into the momentum," said Richard Ross, global technical strategist for Auerbach Grayson in New York.

He said the S&P 500 "has potential to take out that well defined resistance (at 1,220) and it would be a fast move up to the next level, between 1,265 and 1,275."

The sharp turnaround in stocks from a 2011 low hit October 4 took many by surprise, and buying has spurred more buying as traders and money managers try to catch up with the benchmark's performance.

The pattern repeated itself Friday, with the three major indexes closing at or near session highs.

For the week, the Dow Jones industrial average .DJI gained 4.9 percent, the S&P 500 .SPX added 6 percent, and the Nasdaq Composite .IXIC rose 7.6 percent.

Ten of the 30 Dow components, including Microsoft (MSFT.O), American Express (AXP.N) and Johnson & Johnson (JNJ.N), are scheduled to report quarterly results next week.

Big financial names expected to report include Citigroup (C.N), Goldman Sachs (GS.N) and Wells Fargo (WFC.N), which follow Thursday's earnings disappointment from JPMorgan Chase & Co (JPM.N) that battered the sector.

Reported and estimated earnings growth for the current earnings season is seen at 12.4 percent for all S&P 500 companies, according to Thomson Reuters data. That is down from this year's estimate peak of 17 percent in July.

But companies like Apple and IBM, which hit lifetime closing highs on Friday, are expected to trounce expectations. And positive surprises could play into the buying momentum.

"Price will start to discount even more optimism," said Wasif Latif, vice president of equity investments at the San Antonio, Texas-based USAA Investment Management, which manages about $45 billion in mutual funds.

"Growth companies, given the high expectations, need to have a 'wow' factor when it comes to reporting and beating earnings," he said, adding it was certainly possible for these two names to rise further.

The VIX volatility gauge .VIX has declined in the past weeks, closing on Friday at its lowest level since August 3. That could translate into less uncertainty and more of the buying frenzy that drove the S&P 500 to its largest two-week percentage advance since mid 2009.

ECONOMY: LESS BAD THAN FEARED

Softening economic numbers in the United States and abroad, as well as a grinding expansion of the euro zone sovereign debt crisis, stymied investors and drove stocks and commodity prices to heavy losses in the third quarter.

But despite Greece's slow crawl toward a default and rising borrowing costs in Spain and Italy, the perception of efficient action in Europe gave investors the confidence to return to equities --or at least cover their short bets.

Economic numbers, expected at a certain point in the summer to show the U.S. economy was sliding back into recession, have generally come in above those lowered estimates.

USAA's Latif said that even if current levels are subdued and expectations are lowered "it's definitely very encouraging" to have data land better than expected.

Among the main economic indicators due next week are industrial production and capacity utilization on Monday; producer and consumer inflation on Tuesday and Wednesday, respectively; and weekly jobless claims on Thursday. The week closes with the final reading of the Reuters/University of Michigan consumer sentiment index.

(This story corrects the Oct. 14 version in the seventh paragraph to make clear 2011 low was hit Oct. 4)

(Wall St Week Ahead runs every Friday)

(Reporting by Rodrigo Campos; Editing by Kenneth Barry)