China will extend its yuan trade settlement trial program to Hainan Province, the government said Monday.

The program, seen as a step in internationalizing the yuan, was first launched last year for trade between Hong Kong and the neighboring region in southern China, as well as a few other regions.

China's State Council said that it would aim to develop an offshore financial center on a trial basis on Hainan, which is an island in the South China Sea.

New SPR encouraged

China's State Council announced in a report on its official website Monday its support for Hainan to build a national strategic petroleum reserve and develop commercial petroleum reserves in an effort to boost the local economy.

Hainan will accelerate a liquefied natural gas project in the Yangpu Economic Development Zone and a nuclear power project in Changjiang, the report said.

The report said China will develop Hainan into an exploration and service base for oil and gas resources in the South China Sea. But no further details were disclosed.