Coastal water eutrophication and resource depletion have become serious issues in many coastal regions of the world. Seaweed aquaculture in Chinese coastal waters is a very important industry. This work assessed the major environmental benefits of seaweed cultivation, mapped the spatial distributions of various species and analyzed their environmental impacts during 2015 in China. This study found that seaweed aquaculture had brought in considerable environmental benefits, including the removal of about 75,563 t of nitrogen and 9592 t of phosphate from coastal waters, the sequestration of about 539,555 t of carbon, the absorption of 1,980,167 t of CO2, the release of 1,440,612 t of O2 into coastal waters, and the production of 5809 t of Iodine. In addition, seaweed cultivation saved approximately 29,313 t of chemical fertilizers, 1873 t of pesticide and 62,492 ha of farmland compared with terrestrial vegetable cultivation. These results demonstrate that Chinese seaweed aquaculture has turned the pollutants that cause eutrophication into nutrients, which generates considerable environmental benefits as well as socio-economic values. However, seaweed species, as well as coastal water qualities, vary by regions, spatial management of seaweed farms related to the coastal water quality is necessary. In the eutrophic coastal waters, more seaweed species that are highly capable of removing nitrogen and phosphate should be cultivated. Besides, the potentially negative effects of seaweed farming should also be considered before performing spatial management to ensure the healthy development of seaweed industry. As Chinese seaweed production continues to boom, it is a unique opportunity to strengthen the seaweed industry and to reach a win–win situation that both gains considerable environmental benefits and generates substantial socio-economic returns. This is also a promising way for other coastal developing nations/regions to follow.