China needs to reduce food production on its dry northern plains or aquifers will diminish to a "dire" level in 30 years, one the country's leading groundwater experts has warned.

Zheng Chunmiao, director of the Water Research Centre at Peking University, said the world's most populous country will have to focus more on demand-side restraint because it is becoming more expensive and difficult to tap finite supplies below the surface.

"The government must adopt a new policy to reduce water consumption," Zheng told the Guardian. "The main thing is to reduce demand. We have relied too much on engineering projects, but the government realises this is not a long-term solution."

Zheng's comments are based on his studies of the aquifers under the North China plain, one of the country's main wheat growing regions. He said the water table is falling at the rate of about a metre a year mainly due to agriculture, which accounts for 60% of demand.

"The water situation in the North China plain does not allow much longer for irrigation," Zheng said. "We need to reduce food production even though it is politically difficult. It would be much more economical to import."

The government will be reluctant to accept such a radical step, which could weaken the country's ability to feed itself. But it may not have a choice.

Over the past 10 years, Zheng estimates the annual water deficit in northern China at 4bn cubic metres. This is increasingly made up from underground sources, which account for 70% of water supplies. Although some aquifers remain 500 metres thick, others are emptying at an alarming rate. This has created depletion cones, the deepest of which is at Hengshui near Xizhuajiang.

Before trimming agricultural production, the government will try to improve usage efficiency. Plans are now being drawn up to measure and centrally manage the remaining resources, which are currently under the control of regional governments that often tend to draw up water unsustainably for the short-term benefit of the local economy.

The Yellow River Conservancy Commission – which has the nation's most advanced river management network – is expected to serve as a model.

"The government is considering a system similar to ours that will collect data on underground water resources and connect it to our Yellow River monitoring system," said Pei Yong, director of the water regulation division. "I think it will start three or four years from now."

Even before this begins, controls on underground water use are slowly being tightened. Well digging – once a lucrative, ubiquitous and poorly regulated business - is already feeling the pinch.

Kaifeng Well Drilling – a company in Henan – charges 100-500 yuan for each metre drilled, but it has recently laid off workers because it gets permission for only two wells a year now, compared to about 30 in the 1980s.

"Business is very bad. Many firms have had to change business," said the director, who only gave his surname, Wang. "The controls are very tight now. You only get permission to drill in areas with severe water shortages."

Such restrictions are said to have slowed the rate of aquifer depletion, but the situation remains critical. Zheng said much more needs to be done, including demand reduction, water transfers and greater use of desalination plants.

"We will get there because we have to," he said. "If nothing changes, then in 30 years, we will face a dire situation."