In China, Factories vs. Farms

Across the road from Zhao Yuanyi's wheat field in China's Shandong province, Beijing-based Chonche Group is expanding a rail car factory on what used to be 227 hectares of farmland. Nearby, Geely Automobile Holdings makes sedans on an 87-hectare (215-acre) site that four years ago was covered by crops. A five-minute drive away, farmland cedes to dozens of gray-tiled villas for wealthy residents of the city of Jinan, 220 miles south of Beijing. "This year, maybe next, they'll develop my field," the 63-year-old Zhao says, gazing at the land he has tended all his life. If that happens, Zhao would receive modest compensation. Without the farm, he says, "I don't know what I'll do."

The factories sprawling from Jinan, 15 miles to the west, put Zhao on the front line of a clash between a policy of food self-sufficiency and the industrial growth that has made China the world's No. 2 economy. Grain production is "on a shaky base," says Qian Keming, head of the Agriculture Ministry's market and economic information division. "With rising living standards and more consumption of meat, eggs, and dairy, grain consumption is inevitably on the rise."