Lew says China must implement economic reforms soon

Treasury Secretary Jack Lew said Tuesday that China will risk its long-term growth without implementing key economic reforms. 

Lew said China has the resources and tools to manage short-term economic hurdles such as a potential housing bubble, but beyond that his optimism wanes.

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"I continue to think that they have the ability to maintain short-term growth at a level that meets the needs they have in terms of job creation and their broader economy," he said ahead of next week's U.S.-China Strategic & Economic Dialogue.

"If it becomes a reason to delay the implementation of reforms I think it hurts the medium- and long-term prospects in a serious way and that’s how we have engaged with them," he said during an event with the U.S.-China Business Council in Washington.

He argued that China must look beyond any positive short-term economic scenarios and look well down the road. 

“If they look ahead five years or 10 years, if they don’t get to a place where those reforms that are being discussed now are being implemented in a serious way, it becomes much more challenging to be as confident that they’ll have the tools to deal with," he said. 

Those steps are important not just to China's economy but the U.S. and global economies. 

Lew said that while he appreciates the scope of China's economic reforms he “tends to be frustrated at the pace of the change."

"Time is of the essence," he said. 

However, it is clear that China is aware of the challenges it faces. 

“I think that we’ve made a lot of progress conceptually and we now need to have the follow through with understanding how hard that is,” he said. 

Still, he understands that “large, structural change in a government and in an economy is hard.” 

Meetings are set for July 9-10 in Beijing where at least 60 items are expected to get an airing between leaders of the world's two largest economies.