Microsoft has agreed to set up an innovation center in China's Hainan province, and this is just part of a wide-ranging agreement to enhance the region's IT development and skills.

Xinhua reported Monday that the U.S. software giant had signed a memorandum of understanding (MoU) with the Hainan provincial government on Sunday, on the sidelines of the ongoing Boao Forum for Asia held in China.

The innovation center will be the first of its kind for Microsoft in China, and it is hoped it will attract software developers to the region to create products for sectors such as tourism and agriculture, said Li Guoliang, deputy governor of Hainan, in the report.

Li added the province hopes to nurture an ecology-related industrial software ecosystem worth 5 billion yuan (US$798 million).

Orlando Ayala, group vice president for Microsoft, was also quoted in the report saying the company's collaboration with Hainan will boost the region's efforts to become a major international tourist destination.

The report pointed out that besides the innovation center, Redmond will build an IT academy in the province to help train IT professionals, as well software training and intellectual property rights protection.

The software company has been ramping up its presence in China. Last September, Microsoft announced it would bring in another 1,000 staff in China to beef up the talent pool in areas such as research and development, sales and marketing, according to Ralph Haupter, chairman and CEO for Microsoft's Greater China division.