Natural wetlands in coastal areas have been reclaimed in China and other regions of Asia. The reclaimed lands have been used for large-scale industrial farming, replacing traditional farming methods, especially in rice fields. To understand the impact of land-use conversion on biodiversity, particularly of coastal migratory waterbirds, we selected two study sites in Chongming Island, China, representing traditional rice fields versus industrial rice farms. At each site, we carried out waterbird population surveys, measured the environmental factors hypothesized to be important in determining waterbird abundance, and analyzed the effects of the different farming patterns on waterbird populations. Over two annual cycles (from August 2013 to May 2015), 39 waterbird species were observed, with a mean density of 29.3 AE 5.4/ha, on traditional rice fields, compared with 16 species with a mean density of 2.8 AE 0.4/ha on large-scale industrial rice farms. Our results demonstrated that waterbird diversity was higher on traditional rice fields than on industrial rice farms. Analyses of habitat characteristics and waterbird populations showed that traditional rice fields had more preferred habitats for waterbirds, such as more open-water cover areas, lower bare mud cover areas, lower rice plant density, no concrete-covered areas and flooding in the winter. The results suggested that the replacement of traditional rice fields with large-scale industrial rice farms has had a significantly negative impact on migratory waterbirds using the East Asian-Australasian Flyway; such a change could also have detrimental effects on waterbird conservation efforts in China and other countries along this important migration route.