The memorandum of understanding signed earlier this year between Hainan province and Hong Kong is more than a mere policy document. It’s a signal that two of China’s key gateways have entered a new phase of two-way coordination and shared ambition. Spanning multiple sectors such as finance, trade and investment, data, tourism and talent exchange, the memorandum underscores the deeply intertwined future of both places.

Some might interpret these developments to mean stiffer competition for Hong Kong’s place in the national economy. But Hainan’s role isn’t to displace Hong Kong. Rather, it can complement what Hong Kong has to offer. The island province’s free trade port expands the national toolkit and gives Hong Kong a chance to shift from being a sole gateway to becoming a trusted partner in co-developing the future of cross-border finance.

To succeed, Hainan’s reforms depend on reinforcement, structure and global connectivity. This is where Hong Kong comes in with its world-class financial system. Last year, Hong Kong’s asset and wealth management sector oversaw HK$35.1 trillion (US$4.5 trillion), with more than half managed for overseas investors, according to the Securities and Futures Commission.

The city’s strengths in areas such as fund administration, legal services and risk management are critical for scaling the cross-border flows Hainan seeks to attract. Capital may flow into Hainan, but it still needs trusted custodians and infrastructure. Hong Kong can provide that anchor, lending globally recognised credibility.

But finance is only part of the story. The memorandum opens new avenues for cooperation, such as tourism. Linking Hainan’s vast duty-free ecosystem with Hong Kong’s high-end services sector could prompt international travellers to plan itineraries that take them to both places on a single trip. Moreover, combined efforts such as brand partnerships in the cultural and leisure industries could increase the regional competitiveness of southern China.