China and Russia have signed a memorandum of understanding to start formal negotiations on the proposed purchase of more than 20 SU-30 two seat multirole fighters and a contract is expected to be agreed by early next year, Jane's Defence Weekly reported here.

However, with China repeatedly refusing to buy weapons without subsequent transfer of technology, Russia may also transfer the SU-30 production technology to it, it said.

With this deal, ``the Russian-Chinese military-technical cooperation will get a new impetus,'' deputy chief of the general staff Valery Manilov said here after the recent visit of a Russian military delegation to China.

The cooperation agreement also covers training of Chinese military personnel in Russian defence establishments, Manilov added.

During the lastthree years, Russia has earned at least one billion US dollars annually from arms sales to China's People's Liberation Army (PLA).

Combat aircraft and air defence systems account for over 70 per cent of Russia's total arms exports to China, making the preservation of the Chinese market vital to Russia's struggling defence industry.

Following the purchase of 46 SU-27SK single-seat and four SU-27UBK fighters in early 1990s, China has a 15-year licence to manufacture 200 fighters within the country.

However, the contract does not give china right to export the fighters to a third-party country.

One of the main problems which could hamper further cooperation is Russia's export restrictions on weapons which have not yet entered the Russian service sector, the weekly said.

At least 100 joint defence projects already exist between Russia and China, the most numerous being the programmes on adapting Russian systems to Chinese requirements.

Beijing is keen to add to four to six s-300 PMU1 air defencemissile system delivered in 1995, and the 15 TOR-M1 air defence missile system purchased last year, the report said, adding China has expressed its interest in acquiring the Tunguska-M1 air defence gun-and-missile system.

Under a current 500 million US dollar programme, China has become the first country to purchase the Russian project 636 submarine, with a second vessel due for delivery by the end of the year, the weekly reported.

It will receive two class 956 destroyers, armed with Moskit anti-ship missile before 2001 in a 800 million US dollars deal.

President Jiang Zemin was scheduled to visit Moscow early this month for an informal summit with Russian president Boris Yeltsin but the summit has been postponed due to the devastating floods that gripped the nation last month.