In the almost 35 years since leaving the Soviet Union, Kazakhstan has been gradually privatising its numerous state-owned assets. The pace of change has been uneven, but the political will seems to be there – and this desire to attract foreign capital could provide Hong Kong with a huge opportunity.The economies of Kazakhstan and China have long been intertwined. The sprawling Central Asian nation to China’s northwest was once a vital node on the ancient Silk Road, and today it plays an equally pivotal role in the Belt and Road Initiative. It was no coincidence that President Xi Jinping chose Kazakhstan’s capital Astana from which to announce the formation of the terrestrial Silk Road Economic Belt in 2013.Though it is the world’s ninth-largest country, Kazakhstan has a population of only about 21 million and an economy dominated by industries such as oil, gas and minerals. It is the world’s largest producer of uranium and a leading producer of many other important minerals including chromium, copper, lead, zinc, iron, silver, gold, bauxite and manganese.Hong Kong Chief Executive John Lee Ka-chiu during his visit to Nazarbayev University in Astana, Kazakhstan, in June. Photo: ISDAstana’s drive to attract foreign investment is gaining swift momentum. Kazakhstan’s public sector has long been anchored by two core pillars: sovereign wealth fund Samruk-Kazyna and development finance institution Baiterek. While Samruk-Kazyna’s holdings cover gas, electricity, aviation and mining, Baiterek focuses on lending to SMEs, housing and infrastructure. Together, their economic footprint accounted for roughly 40 per cent of national GDP in 2024, according to estimates by the International Monetary Fund.Seeking to transform this public sector landscape, Prime Minister Olzhas Bektenov announced in May 2025 that 475 state-backed enterprises will be privatised, merged or liquidated in phases leading up to 2030.Realising this ambitious goal will require overcoming persistent historical hurdles. Previous privatisation drives, including a major initiative launched in 2016 following a recession, frequently fell short of expectations. Landmark IPOs have faced repeated delays, and the “People’s IPO” boom of the early 2010s resulted in only 21 out of 106 planned assets being auctioned off by late 2014.“For decades, Hong Kong has successfully guided massive Chinese state monopolies through the complex process of modernising corporate governanceProfessor Darwin Choi, Hong Kong University of Science and TechnologyAccording to Dr Yifei Zhang, senior lecturer at the University of Hong Kong Business School, previous attempts suffered from poor execution. “Their assets were corporatised, put on international accounting standards and given proper boards before sale. They also used tough foreign exchanges to prove their companies could handle global disclosure,” he says. “On the other hand, they counted how many small assets were sold while keeping the big ones. They sold monopolies without first creating regulators or allowing [market] entry. Some direct sales were opaque.”