TOKYO/HONG KONG (REUTERS) - It was a colourful start to the year in Japan on Wednesday (Jan 4), as Tokyo markets were jumping in their first trading day of trade after new data flagged a bright outlook for manufacturers.

Across Asia, major markets are kicking off 2017 on a solid note, with economic growth still expected to outpace other parts of the world.

But behind the solid start, there are growing concerns in a region economically dominated by China.

Asian markets are riding the tailwind of a blazing Wall Street rally right now.

But with just over two weeks until Mr Donald Trump becomes the next President of the United States, many investors are worried about what could happen if he moves ahead with plans to slap heavy tariffs on Chinese goods.

A trade war between the US and China could have a destabilising effect across Asia, with the world's top two economies powered by manufacturing and trade.

A massive range of western household names - from Korea's Samsung TV's to Apple iPhones - are produced in China and any impact there could have serious consequences.

China's currency is already limping behind the rising US dollar, and the country's huge stash of foreign reserves is likely to fall below US$3 trillion (S$4.34 trillion) - its lowest point in more than a decade.

So far markets are taking threats of a trade war in their stride, focusing instead on the nuts and bolts of earnings.

But in time, the threats and harsh words predicted by many could send worrying ripples across the economic landscape.