Some analysts believe Moscow and Beijing hope to transform the SCO, hitherto a Central Asian talking shop, into a Nato-style security alliance to keep order in their increasingly troubled neighbourhood. 'Shared security concerns in the Far East and Central Asia are driving Russia and China into much closer security co-operation,' says Sergei Lusyanin, an expert with the official Institute of International Relations, which trains Russian diplomats.

'It's not surprising to see them flexing a bit of joint military muscle for the first time, and I think we can expect much more of that in future.'

At an early July Kremlin summit, Russian President Vladimir Putin and President Hu Jintao pledged to work together to prepare their armed forces 'to deal with new challenges and threats'. These were listed as extremism, terrorism and separatism.

The war games, dubbed 'Peace Mission 2005', saw Russian and Chinese forces deployed to re-establish order in an imaginary country that had been destabilised by ethnic riots and terrorism. Highlights included amphibious troop landings and paratroop drops on THE Shandong Peninsula, a simulated naval blockade, anti-submarine manoeuvres and bomb and cruise- missile strikes carried out by 10 Russian strategic bombers.

Alexander Goltz, an independent military analyst, says a key Russian goal was to showcase the giant turboprop Tu-95 and supersonic Tu-22M bombers to Beijing, which reportedly purchased US$2 billion in Russian military equipment last year.

Russian arms-makers have already sold Su-30 fighter jets, Kilo-class submarines, A-300 anti-aircraft systems, naval frigates and other last-generation Soviet-era weapons, but have little new to offer the tech-hungry Chinese. Though both bomber types are at least four decades old, acquiring them would give Beijing's forces a strategic edge they still lack.

'This is to some extent a marketing ploy, to expand our sales rather than support China's Taiwan policies,' says Mr Goltz. 'There is little doubt that in a real Taiwan crisis, Russia would step aside.'

It has been a long road for Russia and China, who fought a brief but savage border war in the 1960s and had virtually no relations until the collapse of the Soviet Union 14 years ago. Russia today is China's main supplier of modern arms, nuclear technology and energy. Bilateral trade between the two soared to nearly US$20 billion last year and is projected to hit US$60 billion by 2010.

Most experts say the coastal venue and use of strategic aviation suggest the fictional target of last week's war games was meant to be Taiwan. But both countries have been beefing up their presence in Central Asia, where instability has recently threatened several post-Soviet states.

'The dangerous situation in Central Asia is driving Russia and China to overcome their mutual suspicions and work together,' says Vitaly Naumkin, director of the Centre for Strategic and Political Studies in Moscow. 'The SCO is becoming the main vehicle for that strategic co-operation.'

A lightning revolution overthrew Kyrgyz president Askar Akayev in March. Uzbek President Islam Karimov suppressed a revolt by alleged Islamic extremists in May, killing up to 1,000 people. The upheavals deeply alarmed Moscow and Beijing, both of which have substantial Muslim minorities that could be vulnerable to Islamist and separatist ideologies.

As in any potential standoff over Taiwan, the rising Sino-Russian compact also challenges American influence in Central Asia. An SCO summit in July demanded the US set a timetable for removing its military bases in the region, at Manas in Kyrgyzstan and Karshi-Khanabad in Uzbekistan, which were established with Kremlin approval in the wake of 9/11.

'When the US invaded Afghanistan to crush al-Qaeda and the Taleban, Russia and China saw that as desirable,' says Mr Lusyanin. 'But now it looks like the Americans plan to stay forever. The thinking in Moscow and Beijing is that the US has now become part of the problem in Central Asia's because it's encouraging revolutions.'

Last month Mr Karimov gave the US until the end of the year to vacate Karshi-Khanabad.

In a whirlwind visit to the region, US Defence Secretary Donald Rumsfeld convinced Kyrgyz leaders to let the US keep its 1,000 troops and scores of aircraft at Manas indefinitely. Washington pays about US$50 million annually - about 5 per cent of Kyrgyzstan's GDP - for use of the base.

Meanwhile, Russia has announced it will double the size of its own Kyrgyz air base at Kant, open a new intelligence-gathering centre in Tajikistan, and hold joint war games with the Uzbek military this autumn.

Kyrgyz Vice-Premier Adakhan Madumarov was recently quoted in a Russian newspaper as saying establishment of a Chinese military base in his country has been discussed at the highest level.

In October Russia will hold massive joint naval manoeuvres with India, another major arms customer that Moscow has been urging to apply for SCO membership.

'We're seeing a strategic shift which, if it continues, could change the whole picture in Eurasia,' says Mr Lusyanin. 'Russia and China have many things in common. It's not just oil and arms; increasingly it's a shared concept of what the regional and global order should look like.'