(Yicai Global) Jan. 15 -- Participants at the Asia Financial Forum in Hong Kong have expressed grave concerns for the slowing global economy, American stock earnings and Brexit as stock markets around the globe continue to falter.

"The world economy faces more uncertainties and volatility this year," said Wang Zhaoxing, vice chairman of the China Banking and Insurance Regulatory Commission. "We need to pay attention to the stability of financial markets, the real estate market and the impact of the global market," he added.

Live voting during the event, which is being hosted by the Hong Kong government and Hong Kong Trade Development Council, also showed worries over the United Kingdom's pending departure from the European Union.

British Parliament is set to vote today on whether or not it will accept the Brexit deal negotiated by Prime Minister Theresa May and the EU, and the chances of the terms getting the green light look slim.

The result will be hard to predict, financial regulators and institutions should strengthen resilience of the financial system to defend against potential impact from events like this, said Burkhard Balz, member of the executive commission at Deutsche Bundesbank, Germany's central bank.

China's Economic Outlook

Just 15 percent of voters are optimistic on the global economic outlook, according to live voting figures. Some 38 percent are neutral and 47 percent are pessimistic.

That contrasts with 58 percent of positive-thinking voters at last year's event, when only 6 percent had a negative outlook.

Asia drives the majority of global growth, but markets are now starting to worry about a slowdown this year, said Robert Zoellick, former World Bank president. Central banks' tighter monetary policies and political and trade conflicts have also added to market uncertainty, he continued.

China's total import and exports fell 5.8 percent annually to USD385 billion in December, according to official import data released yesterday. Imports fell 7.6 percent to USD164 billion while exports lost 4.4 percent to USD221 billion, increasing the country's trade surplus by 6 percent to USD57 billion. Imports grew 3.9 percent on the year in November and 14.3 percent in October, while exports grew 2.9 percent and 20.3 percent.

Its annual trade surplus with the United States hit a record high USD234 billion, despite US President Donald Trump's efforts to trim the figure.

"The market may focus on export growth as this will directly impact industrial production, employment and gross domestic product," Nomura's Chief China Economist Lu Ting told Yicai Global. "Falling exports are highly likely to suggest a weaker growth in industrial production.

"The import and export data show the effects of the export scramble have ended and the slowed global economic growth is weighing on Chinese exports, but that could mean Chinese policymakers will bring in more stimuli to stabilize GDP growth. We expect China's growth to remain under pressure in the first half of this year, but it will bottom out in the second half," Lu said.

The Organization for Economic Co-operation and Development leading indicator, which is closely linked to China's export growth, has fallen significantly, said Zhang Jun, chief economist at Morgan Stanley Huaxin Securities. The new orders sub-index in the purchasing managers' index for manufacturing has also fallen in recent months, which suggests a substantial slowdown in China's export growth in future, he added.

Banks are expected to accelerate lending and factories are expected to resume operations faster after the Chinese New Year, Sheng Songcheng, an advisor to the People's Bank of China, had said previously. The end of 2018 and the first quarter of 2019 were likely to be the toughest periods, with the Chinese economy bottoming out after the first quarter, he predicted.

Waning US Stock Earnings

Participants also discussed American stocks and the US's economic outlook. US stock markets rallied last week to start clawing back from a 20 percent fall in the fourth quarter of 2018, with the S&P 500 Index up 2.54 percent, the Dow Jones Industrial Average up 2.4 percent and the Nasdaq Composite up 3.45 percent over the week. The S&P 500 has rebounded more than 10 percent over the 12 trading sessions since slumping on Christmas Eve.

Global growth has slowed somewhat, but it is not in recession, said Denis Beau, first deputy governor of the Bank of France. Europe's economy is still expanding, he added.

But risks are building in the US, especially with the government shutdown, which is now at a record-breaking length, he added. Markets fear it could go on even further, and hundreds of thousands of federal workers are still working unpaid -- the economic impact could still increase significantly, Beau said.

The year-end decline in US stock markets was expected, and market players priced in fading earnings and recessions to their decisions, David Kostin, Morgan Stanley's chief US equity strategist, said recently. The biggest risk lies in individual stocks during earnings season, with over valuation and higher-than-forecast earnings cuts being two possible risks, he added.

Market communications from the US Federal Reserve have also changed recently as expectations turn down, with several hawkish Fed members becoming more balanced or flexible in their views. Discussions in favor of dovish views also appeared within minutes of the Fed's December gathering, which noted that low inflation means the central bank can "afford to be patient about further policy firming." Institutional investors widely expect the Fed will not raise rates in March, and will not start hiking rates again until the second half of the year.

Brexit Uncertainty

There are a vast array of variables that could affect the future of Brexit, participants at the forum said, noting that this could have a huge spillover into the financial market.

Theresa May has been struggling to win over Parliament in her bid to curry favor for head Brexit deal, and hundreds of lawmakers in the opposing Labor Party and her own Conservative Party have said they will vote against it.

"[Parliament] has started to discuss a plan B, but what is plan B?" asked Liu Yixiang, secretary for financial services at the Treasury Bureau of Hong Kong, saying that further uncertainty could be on the cards.

If the deal does not go ahead, May hopes to re-negotiate with the EU, though the EU has made clear it has no plans to re-discuss the terms of the exit agreement. Others would like to see a general election, which could see May ousted from her position, or another referendum to determine whether the British public still wishes to leave the EU.

Editor: James Boynton