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Land and fiscal policies will be further improved to support the project, Xi said, adding the government will explore and encourage ways for non-profit institutions to participate in the construction and management of affordable housing.

Xi also urged the two countries to strengthen communication and coordination on issues such as the Doha Round trade talks, climate change and regional cooperation mechanisms, in a bid to constantly enhance China-New Zealand relations.

This is Cameron's second China tour since he took office in May 2010,following an official visit in November 2010.

Leonid Savin, editor-in-chief of the Moscow-based magazine Geopolitika, said the SCO's influence is increasing in the Eurasian region, adding that besides the SCO, the Collective Security Treaty Organization (CSTO) also plays a role in Central Asia.

Code-named "Strike-2013," the drill is the fourth of its kind hosted by the two countries.