Chief Executive John Lee said on Wednesday a cooperation deal between Hong Kong and Hainan will contribute to the nation further opening up on the back of the free-trade advantages from the two regions.

Lee made the remarks as he signed a memorandum of understanding with officials from the southern island province to boost trade and economic ties between the two sides.

Lee, who is attending the annual Boao Forum for Asia on Hainan, said Hong Kong has been the region's major source of foreign investment and that Hainan has also invested heavily in the SAR with the issuances of more than 13 billion yuan worth of offshore bonds.

He said the cooperation deal will make use of the free-trade advantages to be found on both sides and covers five key areas – trade and investment, finance, data flow, tourism and personnel exchange.

"We very much welcome Hainan to expand the scope of recognition of Hong Kong professionals in Hainan, so as to provide more development opportunities for Hong Kong's professional services sector in the region, and to complement the advantages of Hainan's international level of its professional services, while serving the vigorous development of Hainan Free Trade Port," he added.

Lee also said the cooperation deal will help the two regions to create new synergies in their supply chain expansions and explore the Asean markets together.

Specifically, the deal offers support for Hong Kong firms in setting up processing factories in Hainan for premium consumer brands and also encourages Hainan to open up its finance, law, accounting, consulting, exhibition and construction sectors to professionals from the SAR.