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Why China is a serious problem for the euro zone

One of Germany's top independent economic advisers has warned that the Chinese government is losing control of its economy following weeks of severe volatility in financial markets.

The gyrations in financial markets are a serious concern for the euro zone's largest economy and the currency bloc in general given the sheer economic heft of China, Lars Feld, who is one of Germany's "wise men" or state-appointed panel of high-profile academics, said.

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"I am very much concerned with situation in China, it is a much more important problem then Greece is for the euro zone because when you see this transformation of the Chinese economy, liberalization in several respects and to the extent that the liberalization is a taking place, the Chinese government is losing control of the economy," Feld, who also serves as a Professor for Economic Policy at the University of Freiburg, told CNBC.

"It is going to be much more difficult to counteract any adverse effects of its economy. This is definitely going to affect the German economy," he said, with Germany in particular in the firing line due to its high volume of exports and trade links with China.

Krisztian Bocsi | Bloomberg | Getty Images

Feld is not the only one voicing his concern on the impact of a China slowdown, with ratings agency Fitch warning that investors should expect more volatility and growth expectations to be pared.

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"One scenario of gradual re-balancing could see the growth rate decline gradually to about 5 percent on average over 2016-2020. Fitch also expects more volatility around the new normal of slower growth, both in real economic activity and in financial markets," analysts at the rating agency said in a statement released on Friday.

Some 40 percent of Germany's economy is export based according to head of global equities at Henderson Global Investors, Matthew Beesley, with 10 percent of that going to China.

"You've got a few percentage points (of GDP growth) that are Chinese driven (in the euro zone). Of the 1.5 percent in terms of euro zone growth that we might be hoping for, Germany is going to be providing about a third of that growth. So if we see an export driven slowdown impact on the German economy, (as a result of China) that is undoubtedly going to take the edge off euro zone GDP," Beesley told CNBC.

'Super bubble'

Global stock markets sold off sharply through August and into September, with Wall Street seeing its worst start to September in 13 years..

OECD Secretary General Angel Gurria told CNBC that he welcomed the correction in stocks, which followed a staggering run-up in Chinese equities over the last year or so that he termed a "super bubble."

He added though that Chinese authorities needed to be clearer about their monetary policy plans.

"My impression is the Chinese underestimate their muscle, the size and the effects they cause on international markets," Gurria told CNBC from the sidelines of the G-20 gathering in Ankara, Turkey.

He added that such meetings should serve as a reminder to the Chinese that "they have to be in concertation with everybody else, because what they do is very important to everybody else."