In a cold war there will be many interests that will be crossed paths with. It's not simple at all to draw the line in terms of strict economic sanctions as we live in a global world.
China also is a communist state and a great market of its own. People also don't really factor in how spoilt the western states and population is and how they will respond to hardships compared to Russia/China.
As for where hyperinflation comes:
just the energy supply is huge effect for the continent. I mean, people just don't realize how bad this can turn out to be.
In an economic war everyone loses, not just Russia, China or EU. I mean everyone will be affected.
For the record I don't approve at all what Putin is doing but after Crimea I seriously doubt EU will sanction severe economical measures against them..