While the exercise involves a mock intervention to stabilise an imaginary country riven by ethnic strife, Moscow and Beijing say the exercise starting on Thursday - set to include some 10,000 troops from land, sea and air forces – are not aimed at any third country.
Analysts agree Russia and China are unlikely to team up against a common enemy.
They say the manoeuvres are more of an exhibition of Russian arms - including the country's long-range strategic bombers, which can carry nuclear weapons - in the hope of attracting Chinese buyers.
Still, both countries will be looking to prove their military might during the eight days of war games on the Shandong peninsula.
The US Defence Department said in a report last month that China's military was increasingly seeking to modernise and could become a threat to American and other forces in the Asia-Pacific region as it looked to spread its influence.
The Russian military is also eager to show it can still flex its muscle despite much-publicised woes.
Its weaknesses were highlighted again earlier this month when Russia had to call for outside help to rescue seven men stranded in a mini-submarine off its Pacific coast in operations that involved the Vladivostok-based Pacific Fleet.
Russia will showcase long-range
TU-22 bombers in the exercise
The Pacific Fleet is also taking part in the Chinese-Russian exercises, dubbed "Peace Mission 2005".
They come amid warming ties between the countries since the end of the Cold War, driven by mutual concerns about the United States' dominance in world affairs, as well as a shared interest in combating extremism in Central Asia.
The two are the dominant countries in the Shanghai Cooperation Organisation, a grouping that includes the former Soviet republics of Central Asia and which this year took on Iran, India and Pakistan as observers.
Representatives from the organisation's countries have been invited to watch the war games.
At a summit in July, the organisation called on Washington to set a date for the withdrawal of its forces from Central Asia, where they have been deployed since after the 11 September 2001 attacks on the US to help support operations in neighbouring Afghanistan.
The US said it has been advised of the exercises by both governments but is not sending any observers.
"We expect that whatever activities take place would be ones that would further what we believe is everybody's shared goal of stability and peace in the region," US State Department spokesman Sean McCormack said on Monday in Washington.
"We would hope that anything that they do is not something that would be disruptive to the current atmosphere in the region"
Sean McCormack, spokesman,
US State Department
"We would hope that anything that they do is not something that would be disruptive to the current atmosphere in the region."
Despite Russia and China's shared interest in Central Asia, Beijing's main focus for now lies on Taiwan, which China lays claims to and has threatened to invade if the island declares formal independence.
Earlier, Russian news reports said Beijing had pushed to have the exercises staged closer to Taiwan - making it appear to be a possible rehearsal for an invasion.
Analysts have noted the involvement of Russia's Tu-95 strategic bombers and Tu-22M long-range bombers in the exercises - warplanes that can carry conventional or nuclear-tipped cruise missiles and are not usually part of peacekeeping operations.
But the aircraft are expected to top China's shopping list both to deter US assistance to Taiwan in the event of a conflict and project Chinese strength across the region.
During the drills, the Tu-95s will conduct demonstration flights in the area while the Tu-22Ms will test-fire missiles at ground targets, the deputy chief of Russia's Land Forces in charge of the exercise, Colonel-General Vladimir Moltenskoi, said last week.
General Yuri Baluyevsky, the head of the Russian armed forces general staff, said in a newspaper interview last week that the aircraft were taking part because the exercise is being staged far from Russian bases and would help enforce a simulated aerial blockade.
But Russia's air force chief said earlier this year that the bombers would be involved in the exercises to tempt Chinese buyers.
"These weapons that China is buying are clearly designed for a possible standoff over Taiwan," said Pavel Felgenhauer, an independent defence analyst based in Moscow.
The purchase of such strategic items in the past had been prevented by the Russian military, which must approve all sales to outside countries, he said.
"Having such exercises demonstrates the closeness of the two militaries. That's important if China wants to buy these weapons systems," he said. "This is a political-military exercise, much more political than military."
"Having such exercises demonstrates the closeness of the two militaries... This is a political-military exercise, much more political than military"
Pavel Felgenhauer, independent defence analyst based in Moscow
Beyond the sales pitch, it seems highly unlikely Russia would ever join China in a fight over Taiwan, said Robert Karniol, Asia-Pacific editor for military journal Jane's Defence Weekly.
"There are no indications of coming together to form a strategic alliance of Moscow and Beijing," he said.
However, the exercise demonstrates a shift in the Chinese military's policy from its typical inward focus, Karniol said.
"They've come to increasingly accept multilateral solutions and accepted the understanding that there are things to learn from exercising with other countries," he said.