What has really thrown off the Russian economy are the sanctions imposed by the West. Russia is highly dependent on the European market. About 45 percent of Russia's exports go to the EU while more than half of its revenues come from the sale of natural gas and oil to the bloc's members. On the EU side, the volume of imports and exports with Russia represents "only" 9.7 percent of its total trade. The Russian natural gas accounts for about 30 percent of the EU's gas supplies but less than 6 percent of its energy mix.

Though the initial rounds of Western sanctions were symbolically limited in diplomatic and political fields, the following steps taken by the West after the crash of the Malaysian passenger plane MH17 in east Ukraine on July 17, which the West claims was downed by a rocket fired by Russia-backed militants, did manage to make Russia hurt.

On September 11, President of the European Council Herman Van Rompuy announced a new round of sanctions on Russia, targeting financial and energy sectors. The new measures include: EU nationals and companies may no longer provide loans to five major Russian state-owned banks, three major Russian defense companies and three major energy companies; at the same time, the ban on exporting dual-use goods and technology for military use in Russia has been extended.

The new sanctions reportedly have already taken effect, leading to the ruble's depreciation, inflation and capital flight from Russia. However, even media outlets in EU countries admit that sanctions will not force Moscow to change its policies over the Ukraine crisis. What's more, not all the EU members share the same stance over the sanctions, which some worry will eventually hurt their own economic health. For example, Italy and France have proposed moderate restrictive measures, while Sweden and most Central and Eastern European countries are taking a tougher stance. Britain, which has been a major destination of outbound Russian financial assets over the past few years, and Germany, which relies heavily on Russian natural gas supplies, are in a dilemma between the two choices.

For its own part, Russia has responded to the EU sanctions by threatening to reduce and even cut off gas supplies. Moscow even warned that it could ban European airlines from flying across Russian airspace.

Gas exports are a major source of revenue for Russia and another major "weapon" for resisting the West. If Moscow decided to reduce gas supplies to EU countries, it would both hurt the EU's economic recovery and damage Russia's own economy.

Spillover effects

Compared with the EU, the United States' economic links with Russia is not so close. U.S. government statistics show that U.S. exports to Russia in 2013 amounted to $11.13 billion while imports from Russia totaled $27.09 billion. Thus, the United States has been able to take a much more firm stance regarding Russian sanctions. Some have even suggested using U.S. energy resources to reduce the EU's dependency on Russian supplies. Though the proposal sounds good in theory, its financial feasibility is questionable considering the high cost of transporting U.S. energy to Europe.

As one of the major emerging economies, Russia's status in world economy continued rising in recent years. But the Ukraine crisis has cast a shadow over Russian economic growth, which will thereby influence the global economic recovery.

The West also knows that sanctions are a double-edged sword. While the sanctions depress Russia's economic growth, it also means the West is giving up their market shares in Russia, which does not serve their own economic interests. In the short term, Western countries are unlikely to further tighten restrictive measures against Russia.

Calls against settling the Ukraine crisis through economic sanctions are also on the rise. For instance, some countries have proposed stopping Russia from using the transactions system of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a member-owned cooperative through which financial institutions exchange standardized financial messages. But the SWIFT denied the plan for fear that the action will prompt Russia to create its own platform, constituting threats to the business of the SWIFT.

Although Ukraine is not a major trading partner of China, economic relations between the two have grown rapidly and continually in recent years. China has also offered a large amount of loans to Ukraine. The ongoing crisis has naturally obstructed Sino-Ukrainian economic cooperation. On the other hand, some believe Western sanctions on Russia have opened the way for closer cooperation between China and Russia in energy, investment and defense technologies.

China has been calling for a peaceful settlement of the Ukraine crisis since its beginning. To support that goal, the Chinese Government issued a three-point proposal: to establish as soon as possible an international coordinating mechanism involving all the parties concerned to explore means to a political settlement of the Ukrainian crisis; all parties in the meanwhile should refrain from taking any action that may further escalate the situation; and international financial institutions should start to explore how to maintain economic and financial stability in Ukraine.