As Asian economy was barreling ahead, downside risks including higher interest rates in advanced economies and a slowdown in exports were still worth keeping an eye on, said HSBC in a research paper released late Monday.

Asia, more than ever, has received enormous flows from fixed income investors, desperate for yield they couldn't find in the United States and Europe, said Frederic Neumann, co-head of Asian Economics Research of HSBC, in the paper.

"It's important to note the risk of higher interest rates in advanced economies and, concurrently, strength in the U.S. dollar."

HSBC also warned that since Asia has benefited equally from soaring exports as well as domestic demand for its economic development, a possible deceleration of exports next year, may weigh on growth across the region and lead investors to revisit assumptions about Asian's prospects.

"Exports to the U.S. and Europe still matter, and any hiccup there would send painful ripples back into Asia."

Accelerating inflation in the region is another risk after the United States launched a new round of quantitative easing measures, which may lead to wobbles of the dollar and eventually kill domestic demand in Asian countries, the paper said.

The risks of another surge in prices are rising in Asia, and Asian central bankers may then be forced to tighten precipitously, eventually driving consumers and firms to cut back on spending, Neumann said .

"A hard landing, echoing events of 2008, can no longer be ruled out."