BEIJING: Electronics maker Panasonic Corp has announced it would compensate its Japanese employees for living with heavy smog and pollution in China amid reports that many foreigners were leaving the country due to it.

So-called hardship pay is not unusual for employees of foreign firms sent to work to China. But Panasonic is believed to be the first to announce a premium to compensate for polluted air.

Other firms are expected to emulate the move aimed at retaining staff. A recent European Chamber of Commerce survey showed its members regarded pollution as a major business challenge.

Panasonic said the compensation will be for facing the “PM2.5 problem” referring to tiny particles in the air, which easily penetrate the lungs and have been linked to hundreds of thousands of premature deaths.

It did not disclose the amount of the payments, which start in April and would become part of the annual package negotiated for employees in China. The company clarified the compensation would only be available to members of the Panasonic Union and would not cover local staff. It did not disclose how many staff members would be benefitted.

On the weekend, a top Chinese environment official said that air quality was below national standards in almost all the country’s major cities last year. Only three out of the 74 cities monitored by the government met a new air quality standard, said Wu Xiaoqing, a vice minister of environment protection, underscoring a problem that has set off alarm bells over health concerns. Chinese cities are regularly cloaked in a smoggy haze, with many residents donning masks to avoid taking in the toxic air.