Russia Acknowledges Recession Fears; Deepens Military Ties With China as Isolation Continues

Russia is on the verge of collapse as the economy is predicted to sink into recession in 2015. The Russia government has acknowledged the possibility since the country is experiencing the fallout of Western sanctions and plunging oil prices.

News of Russia on the brink of recession was disappointing for investors as the stock market drops with the Russian ruble sinking to a new low against the U.S. dollar, according to the Huffington Post. Russia's economic development ministry changed its gross domestic product forecast for 2015 from a projected growth of 1.2 percent to 0.8 percent.

The country's economic outlook heavily depends on the international oil market. Income from oil exports is used to fund a bigger part of the budget but Western sanctions over the Ukraine crisis have made the economy worse for Russia.

Moody's Analytics chief economist Mark Zandi said Russia sinking into recession has no direct economic impact on the U.S. However, he suggested that Russian President Vladimir Putin could counter economic woes by attempting to divert his people's attention by taking more aggressive policies against Ukraine and the West. The move could create tension especially in financial markets.

Meanwhile, the military ties between Russia and China have deepened significantly as pressure from the West continues to corner Russia over the Ukraine crisis. The Moscow Times reported that Defence Minister Sergei Shoigu announced that Russia and China will widen their naval cooperation especially in the Asia-Pacific region and the Mediterranean Sea.

The deepening relationship between Russia and China's military may be seen as a show of force toward the U.S. and its allies. The planned naval exercise in waters where the U.S. traditionally patrols is an indication that the Russia has options and was not afraid to use them. Any sanction and political isolation initiated by the West would not leave Russia without a friend as Moscow has gained a friend in Beijing.

Vasily Kashin, a Russia-China military relations expert at the Centre for the Analysis of Strategies, told Moscow Times that military-industrial cooperation between Russia and China had declined in the mid-2000s but it resumed since 2010. Both countries are willing to offer top military hardware for sale with Russia interested in selling its S-400 missiles to China.