The electronics giant Panasonic is the first international company to announce it will pay out compensation to expatriates sent to China due to the hazardous air pollution the country suffers from.
All of the firm's expat employees in the nation will be awarded the smog-linked pay premium, although it is unclear exactly how many people this will effect.
China and Japan have extensive trade ties and Panasonic is one of the biggest names in business in the latter country.
Hardship pay is common for expats sent to China, but the deteriorating air quality has been causing increasing concern in recent years and this is the first time it has been specifically named as a factor for a bigger pay cheque.
Chinese Premier Li Keqiang announced his intention to "declare war" on air pollution last year, as business has previously been put ahead of environmental issues.
Huge efforts were mounted ahead of the Beijing Olympics in 2008 and smog levels decreased, but as soon as the athletes and spectators left, the situation returned to normal.
A document from Panasonic outlining the move said: "As for the premium for expatriates to compensate for a different living environment, the company will have a special review for those sent to Chinese cities."
An environment official said at the weekend that air quality was below the national standard in the majority of Chinese cities last year.
This was corroborated in data collected by the government, which stated just three of the 74 cities monitored, met the new standard.
Wu Xiaoqing, vice minister of environment protection, said that this has set off alarm bells for officials.
The issue is one that has gained much attention and various initiatives have been undertaken to tackle some of the side effects of the smog.
These include using the large TV screens in Beijing that usually show advertisements to broadcast pictures of a sunrise.
This is because the air pollution blocks out the sun and an artificial reconstruction is the only way for those living in the city to see the natural phenomenon.
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