Rogoff: Much higher chance of hard landing in China

A warning on China: Kenneth Rogoff

Harvard economist Ken Rogoff said Wednesday the chances of a sharp drop in growth in China have become more likely, but it's hard to tell how sick the economy is due to lack of transparency.

"We're definitely seeing a slowdown. There's definitely a much higher chance that it goes for the worst, that we have a hard landing" he told CNBC's "Squawk Box." "But it's a cloud, exactly whats going on."

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What is also uncertain is how much of a cushion China has, he added.

"China's got trillions of dollars in reserves, I guess, to help bail it out, but it's unclear just how flexible it is, and it's unclear how easily and smoothly it can make this shift."

Rogoff, an expert on financial crises who accurately predicted a debt meltdown would hit the euro zone, has long warned that China poses a major threat to global markets.

The trouble in China began last month when the Shanghai composite plunged more than 30 percent as investors fled a market that had run up about 150 percent in the prior year. .

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Stocks fell anew in the wake of China's decision earlier this month to allow its currency to depreciate amid concerns about falling exports and slower growth in the world's second largest economy.

Global equities have followed Chinese stocks sharply lower, with all major U.S. averages entering correction in a rout that has erased about $2 trillion from the over the course of the last six sessions.

The problem may not be whether China can maintain social and political stability as growth slows, Rogoff said, but whether countries that depend on the No. 2 economy can do so. Resource-producing nations such as Russia and Brazil are more vulnerable to the commodity price rout that has tracked China's slowdown, he said.