"China is no longer a locomotive of global growth, and that has implications for companies. It has implications for commodities markets," Allianz's chief economic advisor told CNBC's "Squawk on the Street."
China's main stock index, the Shanghai composite, recently plummeted 30 percent after running up more than 150 percent in about a year. In response, the government imposed a series of restrictions to stem the fall, including a ban on new initial public offerings and a measure preventing large stakeholders from selling their shares.
At the same time, the Reuters CRB Commodity Index has recently sunk, with gold at its lowest levels since March 2010 and a rally in crude oil sputtering out.
Economic weakness is not limited to China, El-Erian said. Of the BRICS countries, only India is looking good, while he sees problems in China, Russia, Brazil and South Africa.
"If you look around the world there is no longer a dynamic source of growth," he said.
The market is also starting to price in the high likelihood the Federal Reserve will hike interest rates this year, putting further pressure on commodities.
Higher interest rates would presumably draw investors into the U.S. bond market, pushing up the value of the dollar. A stronger greenback makes dollar-denominated commodities more expensive to holders of other currencies.