The main policy orientation of the Hainan Free Trade Port is the liberalization of cross-border capital flows, and the liberalization of cross-border capital flows is a decisive factor in promoting trade and investment facilitation. This paper systematically summarizes relevant domestic and foreign research and discusses it in combination with the development process and policy deployment of the Hainan Free Trade Port. It systematically examines its impact on regional economic fluctuations, summarizes the existing research results and their shortcomings, and aims to provide theoretical references and policy implications for deepening the liberalization reform of the Hainan Free Trade Port and preventing economic fluctuations. Studies have shown that the liberalization of cross-border capital flows has a bidirectional fluctuation effect on the economic growth rate of Hainan: improving resource misallocation and accelerating industrial structure upgrading; increasing the short-term capital inflow and outflow volume and exchange rate level fluctuations in Hainan, and the final outcome depends on the structure of cross-border capital flows, the intensity of financial regulation, and the stability of economic development.