Kazakhstan was where China launched its Belt and Road global trade initiative more than a decade ago, and the continued strong ties between the two countries can be seen in growing cross-border capital markets activity.
More issuers in Kazakhstan are considering Dim Sum bonds this year, while there is growing investor interest in its equity capital market, according to Astana International Finance Centre governor Renat Bekturov.
The AIFC, which started operations in 2018, was established to promote Kazakhstan's capital city of Astana as a financial hub in Central Asia and to attract international investors.
“The whole idea is to facilitate capital and the flow of capital, and make sure investors are protected. The incentives we provide to certain industries and investors are attractive,” Bekturov said in an interview with IFR. “A lot of the companies here are from China. The connection from that part of the world is becoming very strong.”
“We have very strong economic and trade ties with China and Hong Kong. The interest rates are very attractive, so this year we will see more transactions,” Bekturov said.
In recent months, the hub’s role as a link between China and Kazakhstan has become more pronounced with firms seeking out cheaper funding alternatives. Kazakhstan's key interest rate is 18%, compared with China's one-year loan prime rate of 3%.
Kazakhstan’s state-owned companies are taking the lead with renminbi issuance. Last year, Development Bank of Kazakhstan printed the country's debut Dim Sum bond issue, raising Rmb2bn (US$287m).
“DBK has always acted as an icebreaker. It is a quasi-sovereign entity, and when the sovereign is not active in international markets, DBK has always been a proxy to the sovereign,” Bekturov said. “DBK introduced the country to a new market. It was quite successful.”
The bond issue paved the way for state-owned oil and gas company KazMunayGas’s Rmb1.25bn Dim Sum offering in October.
“I believe a few other institutions are working on coming to the Hong Kong market and borrowing there,” Bekturov said. “I think this is logical and what we have been pushing for a long time.”
The board of Kazakhstan's sovereign wealth fund Samruk-Kazyna has approved the issuance of onshore renminbi bonds to diversify its funding channels, according to a press release from the issuer in September.
And when Chinese tungsten mining company Jiaxin International Resources Investment wanted to go public last year, it chose a dual primary listing on Hong Kong's main board and the Astana International Exchange or AIX, which is part of the AIFC.
Jiaxin International, which is developing the Boguty tungsten mine in Kazakhstan, raised HK$1.2bn (US$154m) from the dual listings.
“I think a few transactions will happen, especially when they look at how much interest there was for the tungsten asset in Kazakhstan – many more stories in rare earth and other industries that will also be attractive for Chinese investors,” Bekturov said.
Even so, the equity market “is a bit more challenging,” he said. “I am glad that the first one was a private company. It can serve as a case study for other commercial private entities looking for capital or looking to go public.”
But trade ties between the two countries are strengthening on multiple fronts.
China’s Belt and Road initiative is gaining importance as Beijing navigates a trade war with Washington.
Meanwhile, Kazakhstan, which is Central Asia’s biggest crude producer, also stands to gain as it tries to diversify away from oil and invest more in transport and logistics, rare earths, renewable energy and agriculture.
In 2025, China became the largest trading partner of Central Asian countries for the first time, overtaking Russia, according to China’s state-run Xinhua News. China's exports to Central Asia increased 11% year on year to US$71.2bn, while imports from Central Asia into China rose 14% to US$35.1bn.
Growing AIFC
AIFC expects to play a key role in fostering the relationship.
After China Construction Bank in 2019 became the first fully authorised foreign bank in the AIFC, the hub continues to work toward attracting more foreign institutions, although drawing global asset management and banks has been a challenge.
“They still view this part of the world as more risky and expansion is not on their priority list with all the global turmoil,” Bekturov said.
A key element in AIFC’s efforts toward attracting international investors was the establishment of the AIFC Court, which operates under the principles of English law and is independent of Kazakhstan’s judicial system.
“From a risk perspective, it is about certainty of legislation,” Bekturov said. “We took motivation from Hong Kong, which calls itself a global connector. China’s decision to keep the common law worked and it was able to maintain its status as a financial centre."