"The numbers are terrible. The environment is awful," said Citigroup economist Ken Peng. "The pressures on employment will be huge."
The plunge in exports exceeded analysts' forecasts of about 12-14 percent and could dampen hopes China's slump was bottoming out after data showed the contraction in its manufacturing easing and higher bank lending.
Some analysts said the downturn was not as severe as it appeared because the Lunar New Year holiday, during which many companies close for a week or more, reduced the number of working days in January. The holiday fell in February last year. But even with that factored in, they said trade dropped off in January.
The collapse in global demand for Chinese goods has devastated export-dependent coastal areas. The government says at least 20 million migrant workers have lost their jobs. It is rolling out a 4 trillion yuan ($586 billion) package to stoke consumer spending and has taken steps to help struggling exporters of textiles and other goods.
Imports also plunged in January, by 43 percent, reflecting a slump in demand for foreign components and raw materials used by Chinese export industries, as well as weaker domestic consumer demand. Up to half of China's $1 trillion in annual imports are materials used in goods that are re-exported.
"The decline in imports suggests there is not really that much of a recovery," Peng said.
Exports of machinery and electrical goods fell sharply. Shipments of Chinese-made motorcyles plunged 32.7 percent and those of electric motors 28.4 percent. Sales of toys were down 14.7 percent and those of textiles 12.3 percent.
Sales at the Fuzhou Ideal Bags and Luggage Co., an exporter in Fujian province in the southeast, fell 20 percent in January from a year earlier, said its sales manager, who would give only her surname, Yang. The company's suitcases and backpacks are sold in the United States, Europe and Latin America.
"Our customers in the U.S said their clients' purchasing power was shrinking," Yang said. "We certainly hope the market would come back later this year, but it will depend on the orders we get after the Lunar New Year holiday"
Imports of industrial raw materials dropped sharply - a painful blow to commodities suppliers. Chinese purchases of foreign rubber fell 77.7 percent and those of materials used in textiles by 57 percent.
Analysts say a recovery in trade depends on the United States and Europe emerging from their own slumps, and the timing of that is unclear.
"For 2009, China's export prospects are grim," said Sherman Chan of Moody's Economy.com in a report. She said full-year 2009 exports should shrink "since most parts of the global economy will remain in recession for much of the year."
A deputy commerce minister, Jiang Zengwei, appealed this week for other governments to support free trade. He said China would avoid "buy local" restrictions in its stimulus, rejecting protectionist measures like those in Washington's proposed plan that have provoked criticism abroad.
Beijing is trying to reduce reliance on exports with its stimulus, which calls for spurring consumer spending by injecting money into the economy through government outlays on highway construction and other public works.
Economists say the stimulus should start to take effect in the quarter beginning in April. Some say a recovery could begin as early as the second half of the year but there are no firm signs of an upturn yet. Indicators show manufacturing shrinking and investment and consumer spending weakening.
Because of the Lunar New Year effect, Merrill Lynch economists Ting Lu and T.J. Bond said combined figures for January and February will give a better idea of the state of exports.
But they still expect the trade decline in the combined period to be sharper than December's. Exports will shrink by 7 percent and imports by 20 percent in the first quarter of the year from a year earlier, Lu and Bond said in a report.
China's global trade surplus widened to $39.1 billion in January, the third-highest month on record and just ahead of December's $39 billion trade gap.
The politically sensitive trade surplus with the United States widened by 1.9 percent from the January 2008 to $12.3 billion, according to customs data.
China's import weakness could be a blow for its trading partners, especially Asian economies that rely on Chinese manufacturers as leading buyers of their exports of industrial components and raw materials.
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Associated Press researcher Bonnie Cao in Beijing contributed to this report.
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