In the span of 10 years, China has become one of the strongest forces of transformation Latin America and the Caribbean (LAC) have seen in over a century. Perhaps more important, China's presence has the potential to bring unprecedented prosperity to the region.

China's relationship with LAC these days is at a historic high. Nevertheless, if the excitement is not translated into smart policies, the disappointment can be as big as the opportunity. Let's take a look at the current state of affairs in three areas that could decide the success of this relationship: political economy, private sector cooperation and knowledge exchanges.

From a politico-economic perspective, China-LAC relations could not be better. The China-Community of Latin American and Caribbean States Cooperation Forum will certainly be revolutionary. Even though the forum is one of the few regional institutional dialogues, it does not include the United States and Canada, it does not mean that China's ties with the region are ideological. For example, in 2009 China joined the Inter-American Development Bank (IDB), an institution whose largest shareholder is the US and which will, from now on, coexist with the newly created BRICS development bank.

Undoubtedly, China's pragmatism has been crucial to the strengthening of trade and investment ties with the region. LAC countries' leaders should take note and try to reach an agreement to prevent China from becoming a subject of domestic political debates.

At the private sector level, too, there are several challenges. While reading cold economic statistics, one sometimes forgets that they are the result of millions of commercial transactions carried out by rational individuals. Therefore, the importance of businesses from both regions getting to know each other should not be underestimated, especially, given the geographical distance and cultural differences. This is the reason why matchmaking activities to promote business-to-business ties are essential.

Chinese and LAC enterprises should make it a point to attend the China-LAC Business Summit, an annual event co-hosted by the China Council for Promotion of International Trade and the IDB that will be held for the eighth time in September and has become a major exchange platform for government and business leaders.

Knowledge exchange is an area that requires the most efforts. While addressing Latin American leaders, President Xi Jinping said China was ready to work with the countries of the region to boost inter-regional trade to $500 billion a year by 2024. To achieve that goal, it is vital to create soft infrastructure that facilitates understanding between key players. LAC countries should think about implementing policy initiatives that will help produce professionals with deep knowledge of Chinese business culture and environment.

For the average citizen in LAC, China is still a distant force, not easy to disentangle. Even if you ask a top Latin American CEO to name 10 Chinese companies that are revolutionizing the world, he may not be able to do so immediately. This is not a small thing, because these companies could be LAC companies' likely future business partners and one cannot think of partnering with organizations that one cannot even name.

Latin American people believe in the adage, new brooms always sweep clean. This is the honeymoon period for China and LAC. But difficulties are bound to emerge later. An economically strong China is probably LAC's greatest opportunity to jump on to the bus of development. A stable, dynamic Latin America could be China's next hot investment destination and a major ally to promote China's global agenda. If the two sides keep this in mind when faced with common challenges, the partnership can only be beneficial.

The author is an investment consultant with the Foshan Bureau of Commerce and a former research scholar in China-Latin America Economic Relations at the Harvard Law School and Tsinghua University.