Alongside Liverpool and Tottenham, Arsenal are the latest Premier League side to have been credited with an interest in the Colombia international, who is currently on loan at Bayern Munich from Real Madrid.
The 27-year-old is said to be one of Unai Emery's side's biggest targets for the current transfer window, but ex-right-back Lauren, who won two Premier League titles with the club, says they should look elsewhere to strengthen their midfield.
"I’m not sure that Arsenal should be seriously considering James Rodriguez, even on loan," he told Bwin. "Rodriguez has got a lot of talent, but the warning signs are there that he hasn’t been able to settle at either Real Madrid or Bayern Munich. He comes with a massive wage bill so Arsenal would have to make sure he was fully on board with the philosophy of the club.
"Rodriguez has played in the big games for the big clubs so there’s no doubting his talent. If Emery can get the best out of him then he could make a real impact on whether Arsenal qualify for next season’s Champions League. It’s a roll of the dice."
Instead, Lauren believes they should go back to one of their earlier potential signings, urging them to snap up Denis Suarez as he continues to struggle for playing time in Spain.
"Suarez should be Arsenal’s number one target this transfer window. He’s an excellent player and he’s having to fight with so many top players to get first-team football at Barcelona," Lauren added. "Arsenal should look to sign him above the likes of Rodriguez, no doubt about it."
According to Lauren, it would be a good idea to take him to the Emirates Stadium.
"Carrasco is a very good player that could offer a real presence going forward for Arsenal," he added. "He proved himself at Atletico Madrid and had a good World Cup. He’s got the ability to beat a player and has good feet.
"If Carrasco seriously wants to come back to European football for the benefit of his career, I would imagine he would need to drop his wage demands and join Arsenal.
"Carrasco is still young, but if he wants to challenge himself then he can’t afford to stay away from the top leagues for much longer. He won’t be testing himself in the same way in the Chinese League and it could affect his chances of reaching his potential."
The discussion around the Gunners is not entirely about potential signings, however, as they will lose midfielder Aaron Ramsey for free at the end of the season.
Either way, Lauren feels it is a blow to his former team.
"Ramsey’s likely departure has perhaps been something the club could have sorted out earlier. He’s been outstanding for the club and a few long-term injuries stopped him from really fulfilling what he could have achieved for both himself and Arsenal. It’s a blow that he seems set to leave and he’s not going to be easy to replace.
"Ramsey is one of Arsenal’s best players and should be playing up until the moment he leaves. Arsenal don’t have the luxury of being able to leave someone of Ramsey’s quality on the bench. They are in a battle to finish in the top four and the future of the club is more important that focusing on a player who looks set to be leaving.
"Ramsey has given 100% every time he’s been on the pitch so there’s no need to drop him. If he was to drop in form or show any lack of professionalism then it’s a different story but looking at how well he played against Chelsea that certainly doesn’t seem to be the case."
Meanwhile, there is some uncertainty surrounding Mesut Ozil, who has been left out of the squad on occasion by new boss Emery, but it is up to the former Real Madrid star to prove his worth.
"Ozil has to show Emery that he’s willing to fight for his place and get into the first team again," Lauren said. "Emery is a fair manager and will only play players that are willing to put their all on to the pitch. For him to be out of the squad or on the bench, Emery perhaps has question marks over how Ozil can fit in a system that is demanding of its players."