Economic sanctions against Russia imposed by the E.U. and the U.S. are not good for the global economy, Russian Deputy Prime Minister Arkady Dvorkovich told CNBC on Wednesday.
"Sanctions are not good from any side. Sanctions are not good for [the] U.S. economy... not good for Europe…. and when Europe and the U.S. establish sanctions, they face difficulties as Russia faces difficulties and nobody wants sanctions, that's clear," Dvorkovich said on the sidelines of the World Economic Forum in Tianjin, China.
"The global economy is not in good shape even without sanctions.. and the Russia economy was dealing with huge changes during the last few years, including the challenge to diversify and to go away from energy alone," he added.
On Monday the E.U. formally adopted a package of fresh sanctions against Russia including restrictions on large Russian state-owned oil companies operating in Europe, but said they wouldn't be enforced yet, to give time to assess whether a cease-fire between Russia and Ukraine - agreed on Friday - would hold.
Russia retaliated to western sanctions last month by banning food imports worth around $9 billion from the European Union, the U.S., Canada, Australia and Norway, in a move that has led to higher food prices for Russian people.
The deputy PM told CNBC his government views the situation in Ukraine as an "external crisis" but felt obligated to intervene because it occurred so close to Russia's borders.
"It's one of the key trade partners of Russia, it's an integral part of the common European space and it's our neighborhood, our common neighborhood," he said.
"We cannot just watch what is happening without dealing with it. If [Ukraine's] economy is being destroyed, then we need to help...The key thing now is to stop the violence. The cease-fire was good news during the last [few] days in Ukraine," he added.
Dvorkovich told CNBC that Russian President Vladimir Putin wants Friday's ceasefire to hold.
"I cannot speak on behalf of our President but what I know is Putin our president wants this to stop, and he will make everything possible to stop it," he said.
However, Dvorkivich believes it's ultimately up to the Ukrainian people to solve their problems: "Now it's time to establish inclusive dialogue, find a compromise... but it's up to Ukraine's people to do this, it's not up to U.S, Russia or Europe," he said.
"After that we will have hard time dealing with the problems of the Ukrainian economy," he said. "[The economy] is destroyed and requires huge financing from Europe, Russian, the states [U.S.] and international financial institutions to be rebuilt."
The $400 billion deal between National Petroleum Corporation and Gazprom announced in May highlights strengthening ties between Russia and China, Dvorkovich said. Under 30-year contract Russia will deliver 38 billion cubic meters of natural gas to China annually.
"Our deal with China was very important since it shows China wants to have a safe, long partnership and establish its energy security with Russia... we are talking with China about many other projects," he said.
Asked whether such deals could close China and Russia off to the global economy, Dvorkovich said it's important to remember that the structure of the global economy is changing.
"During [the past] few decades, the U.S. played a role as a single center of power. Now the U.S., China, and the BRICs as whole play a higher role in the global economy," he said.
"When it's China alone it [will not be] not sufficient... When it's China, Russia, India and Brazil and South Africa it's a much bigger power. Our economic ties are strengthening; it's not just about energy supplies... it's about cooperation in all kinds of areas from agriculture to aerospace," he said.