Procter & Gamble Co said yesterday it has become the first foreign venture approved by China's State Administration of Foreign Exchange to allow its staff on the Chinese mainland to own its shares listed in overseas markets under its incentive program.

Approval for the scheme, which is offered by the biggest United States consumer-goods maker to its Chinese employees, came after a five-year-long effort.

The company is still working out details of the program with the Guangdong branch of SAFE.

P&G China will allot a quantity of stocks to more than 7,000 employees based on a certain percentage of their salary, and staff can decide if they want to participate in the incentive scheme, the firm said.

"We hope the program can help Chinese employees develop a good habit - saving money for the future," said Hide Aida, general manager of human resources at P&G China.

The firm was not able to reveal how the program will work as mainland individuals are now not permitted to trade overseas stocks and its incentive plan does not come under the qualified domestic institutional investor (QDII) scheme.

Officials from SAFE were not available for comment.

More than 40 percent of P&G employees in 63 countries and regions are holding shares of the firm, the company said.

The central government has been easing restrictions on investments in overseas markets to reduce the abundance of funds in the mainland stock market.

China has the QDII program which permits local investors to invest in overseas stock markets via selected financial institutions.

The government is also working on a "through train" program which will allow mainland individuals to buy Hong Kong equities directly.

(Shanghai Daily February 1, 2008)