The Australian, playing in his first tournament since February due to a hand injury, began the third round in Fanling three shots off overnight leader Ernie Els but shot a five-under-par 65 to move to the summit, with compatriot Scott Hend in second.
His day started badly, though, as the 36-year-old dropped a shot further back with a bogey at the first, but he then produced a faultless round that featured six birdies, including four in the last six holes to finish with a flourish.
Fraser's iron approach into 18 was judged perfectly to land a few feet from the hole, setting up his final birdie, leaving Fraser delighted with the way he turned his day around.
"It was good," he told the European Tour website. "Towards the end it was pretty good but the start wasn't ideal, a bit scrappy, but I pulled my finger out final and started playing golf on the back nine.
"I was very happy with how I finished coming down the stretch.
"I felt I was heading in the right direction, last week everything fell into place but I still wasn't sure what to expect.
"Hopefully I can keep playing the way I am playing, I feel pretty comfortable out there at the moment."
Els endured a far more inconsistent round, with an early birdie offset by wayward tee shots at the fifth and ninth that saw him drop three shots and fall down the leaderboard.
An eagle three at the 13th saw him move back into contention, only for two bogeys in the final four holes to leave the four-time major winner with a round of 71, three shots adrift of Fraser.
Javier Colomo is level with Els going after the 30-year-old produced the joint best score of the tournament, a 64, to rise 39 places.
Hend is Fraser's closest rival but he let things slip after starting with three birdies to climb to the top of the leaderboard.
An even share of bogeys and birdies - plus nine pars into the mix - kept him in contention but denied the 31-year-old top spot.
Mark Foster, Jbe Kruger and Angelo Que are a further shot back on nine-under, with Foster birdieing seven of the back nine holes to charge into contention.