Food security remains a primary concern because of the large population and scarce land resources in China, and it is a core task to determine the appropriate proportion and scale of fallowing for fallow systems. The aim of this study was to systematically estimate the grain production potential (GPP) of existing and unexcavated cultivated land due to land use change from 1990 to 2017 and calculate the theoretical fallowing scale by using a population carrying capacity model. The reserved GPP from cultivated land to be excavated was 7470 × 104 t in China, and the GPP stored by the change in grain yield per unit, multiple crop index (MCI) decline, and agricultural structure adjustment were 921 × 104 t, 4321 × 104 t, and 7760 × 104 t, respectively, and the lost GPP caused by construction land expansion was 5287 × 104 t. The population carrying capacity of cultivated land in China was estimated to be 1.469 to 1.515 billion in 2017 on the basis of the national average living standard. The proportion of the population that could be fed more was between 6.28% and 9.54% depending on the number of people included, which provided an opportunity to implement the fallowing system in China. Meanwhile the proportions of the theoretical fallow scale were 6.28% and 9.54%, and the fallow scale ranged from 850 × 104 hm2 to 1296 × 104 hm2 under the premise of fully tapping the potential of cultivated land. In addition, taking the decline in MCI as an example, the grain yield reduction was equivalent to the grain yield of 829 × 104 hm2 of newly reclaimed cultivated land over the past 30 years, which saved 621.48 billion yuan. The costs and benefits when formulating relevant policies of land utilization should be considered, and exploiting the productive capacity of cultivated land that exists is better than reclaiming new cultivated land.