* China flexes muscles in Moscow's former imperial backyard
* Drug traffickers, militants fuel regional instability
(Adds analyst comment)
By Robin Paxton
MATYBULAK, Kazakhstan, Sept 13 (Reuters) - Thousands of Russian, Chinese and Kazakh soldiers began two weeks of war games in Kazakhstan on Monday, preparing to counter regional threats ranging from drug traffickers to Islamist militants.
More than 3,000 troops will take part in the exercises. Almost a third of them are Chinese, underlining Beijing's growing clout in the former Soviet republics of central Asia, a region Moscow still sees as within its sphere of influence.
The "Peace Mission 2010" exercises are the largest in three years involving the Shanghai Cooperation Organisation (SCO), a six-nation group led by Moscow and Beijing that some analysts say might one day become a counterweight to NATO.
However, the SCO, which also includes the central Asian states of Kyrgyzstan, Tajikistan and Uzbekistan, has limited itself to smaller military exercises and security initiatives.
The SCO, whose member states have a population of over 1.5 billion, or a quarter of the world's population, has focused in recent months on fighting terrorism and radicalism in the region, as well as drug trafficking from Afghanistan.
"Now and for the next few years, terrorism, separatism and extremism will remain serious factors in the stability of this region and the world," Ma Xiaotian, deputy chief of staff of the Chinese armed forces, said at a ceremony to open the exercises.
"Upholding security and stability in the region is the main aim of every SCO member state and every officer and soldier taking part in this exercise."
China's growing clout in central Asia is underpinned by billions of dollars in investment in the region's oil, natural gas and metals reserves. Beijing has also issued loans to several different countries in the region.
"All of this is circumventing Russia, especially in energy and economics, but subsequently also in political clout," said Lieutenant Colonel Marcel de Haas, senior military research fellow at the Netherlands Institute of International Relations Clingendael.
SIMMERING INSTABILITY
China, Russia and Kazakhstan each sent 1,000 troops to the exercises, which are taking place at the Matybulak military range in southern Kazakhstan, about 200 km (125 miles) west of Kazakhstan's commercial capital and largest city, Almaty.
Kazakhstan's Defence Ministry said more than 300 military vehicles and 50 Kazakh, Chinese and Russian aircraft and helicopters would join the anti-terrorist drills.
Tajikistan and Kyrgyzstan each sent 150 troops, the ministry said. Uzbekistan was invited, but said it would not send troops.
Authorities in Tajikistan are concerned about Islamist radicalism following two bombings and a series of armed skirmishes. Tajikistan has jailed over 100 people this year for belonging to banned groups.
The interim government of neighbouring Kyrgyzstan, which hosts U.S. and Russian military air bases, has struggled to control the nation's south, where at least 400 people died in ethnic clashes in June.
The fact that the SCO did not intervene in Kyrgyzstan's worst bloodshed in modern history highlighted the fact that cooperation between member countries was still very limited when compared with NATO, said de Haas.
"The SCO did not act because it was a domestic issue, in spite of the transnational consequences," he told Reuters.
"China itself has problems with Tibet and the Uighurs," he said. "When it comes to conventional warfare or irregular warfare, the level of activities of the SCO is very low, very ad hoc, and there are no collective standing arrangements." (Editing by Ralph Boulton)
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