Coastal fisheries are vital for food supply, employment, and social stability. However, overfishing is a common problem, often attributed to open access. Territorial Use Rights in Fisheries (TURFs) have gained popularity as a tool to improve the sustainability of coastal fisheries, but research on TURFs in China is limited. This paper examines the island reef fishery lease policy implemented in Shengsi County, Zhejiang Province, within the Ma’an Islands National Marine Special Reserve. The policy leases the use of island reefs to a collective, aiming to address overfishing and resource degradation by establishing fishing area boundaries and limiting the number of users and usage time. Technically, it is an application of TURFs, and it represents a shift from traditional fishing licenses to collective compliance. This experience has disrupted the existing top–down fishery governance structure and signifies a transition to a rights-based fishery management system in China. Through a comprehensive investigation and analysis of the policy’s implementation, this research identifies the factors contributing to its flaws. These include the inadequate provision of national and local government policies, insufficient support for policy implementation from fishery management authorities, and the limited involvement of fishermen’s organizations. To enhance coastal fishery management, we propose that the Chinese government should build upon existing foundations by clarifying fishing rights through central and local laws and policies. Additionally, there is a need to strengthen data monitoring of coastal fisheries, conduct multidisciplinary research to improve the allocation mechanism of fishing rights, adopt diverse fishery management approaches to enhance supervision capabilities, establish a collaborative governance mechanism, and foster coordination and cooperation between grassroots fishermen’s organizations and government departments.
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