Kazakhstan sits at the crossroads of a shifting global order. Its geography — landlocked between Russia and China — places it in the heart of Eurasia. Its economy — resource-rich and export-driven — ties it to global markets and supply chains. And its future — increasingly shaped by great power competition between the United States and China — invites both unprecedented opportunity and rising pressure.
But while analysts often frame Kazakhstan’s future in the context of the US–China geostrategic rivalry, this lens misses a crucial point. The real challenges — and opportunities — facing Kazakhstan lie within. Institutional reforms, economic diversification, and addressing stark regional inequalities will ultimately shape whether Kazakhstan remains vulnerable to external shocks or emerges as a resilient, dynamic player in its own right.
In recent years, Kazakhstan has strengthened economic relations with both the United States and China, balancing its foreign policy under the doctrine of “multi-vector diplomacy.”
On the one hand, the US remains an essential technology partner. In 2023, pharmaceutical giant Pfizer committed $1.6 billion to build a facility in Kazakhstan to produce the pneumococcal vaccine Prevenar 20 — a critical investment in the country’s pharmaceutical capacity and knowledge transfer.
On the other hand, China has overtaken Russia as Kazakhstan’s largest trading partner. Bilateral trade reached $43.8 billion in 2023 and grew further in 2024, accounting for 44% of Kazakhstan’s total foreign trade turnover.
Moreover, Kazakhstan’s trade with BRICS nations — of which China is the most prominent — surged by 55% to over $70 billion in 2024. The first five months of 2024 alone saw foreign trade exceed $55 billion, with China contributing $11.4 billion of that total, reflecting 20% year-on-year growth.
This booming trade has sparked concerns in some quarters about growing Chinese influence over Kazakhstan’s economy. Critics often point to an “unequal” trade relationship: China exports machinery and high-tech goods to Kazakhstan, while importing mostly raw materials like oil, metals, and agricultural products.
Kazakhstan’s trade structure with China has slowly but steadily evolved. While raw materials still dominate exports, Kazakhstan is importing more capital goods, intermediate inputs, and consumer products — critical to modernising its industrial base.
Investment in logistics infrastructure — such as the Khorgos International Centre for Boundary Cooperation — and in local manufacturing capabilities suggests a maturing economic relationship. Chinese investment is not just resource extraction; it is also reshaping supply chains and helping Kazakhstan to develop industrial capacity.
The question is not whether Kazakhstan should engage with China or the US — it already does and will continue to. The real question is whether Kazakhstan can leverage these external ties to address its domestic weaknesses.
The January 2022 unrest in Kazakhstan was a wake-up call. Triggered by a sharp rise in liquefied petroleum gas (LPG) prices, the protests quickly escalated into a broader revolt against systemic corruption, inequality, and lack of accountability.
For decades, parts of Kazakhstan’s political and business elite siphoned wealth to offshore accounts, hollowing out domestic institutions and weakening social trust. Transparency International consistently ranks Kazakhstan in the lower half of global corruption indices.
Despite government pledges of reform following the 2022 protests, rent-seeking remains embedded across sectors, from energy and mining to public procurement and banking.
Without genuine reforms to judicial independence, anti-corruption enforcement, and fiscal transparency, foreign investment alone will not ensure inclusive growth. Worse, foreign capital — whether from China, the US, or Europe — could end up reinforcing elite capture if governance structures remain weak.
Kazakhstan’s economy remains highly dependent on hydrocarbons and mineral resources, making it vulnerable to global commodity price swings.
The oil price crashes of 2014–2016 and 2020 inflicted major damage on the national budget and currency stability. Ironically, the January 2022 unrest erupted despite Kazakhstan’s vast oil and gas reserves — a stark reminder that resource wealth does not automatically translate into prosperity for ordinary citizens.
Structural transformation has occurred since independence in 1991, with growing ties to China and increased foreign investment stimulating new sectors. But diversification has been slow.
The World Bank notes that Kazakhstan’s energy transition could serve as a lever for deeper structural change. Investing in renewable energy, creating a functional carbon pricing system, and fostering green technologies could position Kazakhstan as a regional leader in clean energy — while reducing its vulnerability to fossil fuel dependence.
Perhaps the most overlooked challenge facing Kazakhstan is regional disparity.
Astana and Almaty, the political and commercial hubs, boast GDP per capita figures exceeding $12,000. In contrast, rural and peripheral regions — like Kyzylorda — lag far behind at around $5,000 per capita.
This inequality manifests in poor infrastructure, limited access to healthcare, education gaps, and weaker job creation outside major cities.
A 2021 study on community entrepreneurship highlighted how such disparities have stunted the halal meat industry — a sector with global demand. Kazakhstan has the land, livestock, and know-how, but logistical challenges and uneven resource distribution have hampered development.
Addressing regional inequality requires not just budget allocation but smarter investment in infrastructure, digital connectivity, rural enterprise support, and decentralised governance.
Rather than being swept along by US–China competition, Kazakhstan’s future prosperity hinges on how it tackles these internal bottlenecks.
External investment is essential, but it cannot substitute for domestic reform. China’s Belt and Road Initiative (BRI) investments, US technological partnerships, and European trade links can provide tools — but not solutions — for Kazakhstan’s governance challenges.
The next phase of Kazakhstan’s development will require:
- Ensuring judicial independence from political interference.
- Enhancing anti-corruption agencies with real enforcement powers.
- Increasing transparency in state-owned enterprises and procurement processes.
- Incentivising investment in non-resource sectors like renewable energy, IT, agriculture, and logistics.
- Supporting SMEs and reducing barriers to entry for entrepreneurs.
- Developing human capital through education and skills training.
- Improving infrastructure in rural areas — from roads to internet connectivity.
- Facilitating access to finance for rural entrepreneurs.
- Strengthening local governance and fiscal decentralisation to allow regions more autonomy in development planning.
Kazakhstan’s strategic location and resource wealth offer undeniable advantages. Its relations with both the US and China provide access to capital, technology, and markets that many countries would envy.
But this geopolitical positioning also comes with risks — chiefly, the temptation to focus solely on external dynamics while ignoring internal weaknesses.
The real test for Kazakhstan in the years ahead is not whether it can balance China and the US — it has shown skill in that arena for years. The test is whether it can translate its resource wealth and foreign partnerships into sustainable, inclusive development that benefits all its citizens, not just a narrow elite.
In an era where smaller states are often seen as pawns in a great power game, Kazakhstan has the chance to chart a different course: one where domestic reforms, not foreign rivalry, determine the country’s destiny.
It will require political will, social consensus, and institutional rebuilding. But if Kazakhstan can meet this challenge, it may yet emerge not just as a strategic transit state — but as a resilient, innovative economy at the heart of Eurasia.
