Stephen Roach, economist, said that any Russian default on its sovereign debt due to the Ukraine crisis will have an impact on emerging markets such as China.

According to CNBC’s SquawkBox Asia, “If Russia defaults on its debt…there will be wide spillover effects on sovereign debt in developing markets around the world. China will not be unaffected by that.” “But I’m talking really of broader risks — guilt by association.”

Roach, who is also a Yale University Senior Fellow, said that China can’t afford to be in close contact with Russia, as Russia mounts this God-awful attack against the innocent Ukrainian people right now.

“And the sooner China breaks with Russia, the better — and we’ll have to wait and see and watch that very closely,” he said.

Soon after Moscow’s attack on Ukraine, sanctions were announced by the United States on Russia’s sovereign and banks as well as on its central bank. Since then, major ratings agencies Fitch, Moody’s and S&P have slashed the country’s sovereign rating to “junk” status, saying Western sanctions could undermine Russia’s ability to service its debt.

China said it won’t participate in those sanctions against Russia.

FTSE Russell, a major international index provider, and MSCI announced last week that Russian stock will be removed from all of their global indexes. MSCI announced it would reclassify its MSCI Russia Indexes as “standalone market” instead of emerging markets.

London-listed Russian stocks collapsed last week27 Russian securities. However, almost all of their value had been lost by Thursday’s announcement.

Oil prices surged Monday morningAsia’s Secretary of State Antony Blinken, U.S. secretary of state said Washington and its allies were considering banning Russian oil- and natural gas imports.

U.S. crude rose almost 9% higher at $130 per barrel, while Brent rose as much as 9 % to approximately $128 per barrel. Both crude and Brent reached highs not experienced since 2008. Brent was 8.85% higher to $128.56 and crude US oil was 7.49% lower at $124.35.

Russia follows the U.S., Saudi Arabia and Canada. the world’s third-largest oil producer. You can also use it to largest exporter of crude oil to global markets.

Roach said to CNBC, that higher oil prices “definitely are stagflationary.”

Stagflation is when the economy is simultaneously experiencing stagnant activity and accelerating inflation. This phenomenon was first noticed in 1970, when an oil shock led to a prolonged period of high prices and sharply declining GDP growth.

“It certainly does put pressure on central banks around the world … and raises the prospects of significantly higher interest rates as a result, but it remains to be seen if this trend is going to continue for many years as the stagflation of the late 70s and early 80s did,” Roach said.