Sheng Huaren, vice chairman of the Standing Committee of the National People's Congress, the country's highest legislature, said local governments must strictly tighten the supply of land for industrial development as the demand was too high.
Investment in fixed assets had been growing rapidly, he said at a gathering to mark the 20th anniversary of China's law on land management.
The country was unlikely to meet the target of a minimum of 1.2 billion ha of farmland by 2010, which was set by the central authorities in the 2006-2010 economic and social development program, Sheng said.
Laws on land resources must be strictly enforced as the depletion of farmland from rapid industrialization and urbanization would be a problem long into the future.
With a population of 1.3 billion, China's per-capita farmland and fresh water resources are about one quarter of the world's average.