While creating useful space for agriculture, industry, and urban development, coastal reclamation damages considerably the marine ecosystems which human-kind depends on. How to control the large-scale coastal reclamation is a great challenge in China. This paper presents an analytical framework and model to estimate the Total Allowable Area for Coastal Reclamation (TAACR) to provide scientific support for the implementation of a coastal reclamation restriction mechanism. Various benefits and costs, including the ecological and environmental costs of coastal reclamation, are systematically quantified in the framework. Model simulations are developed using data from West Sea of Xiamen. The results show that the TAACR in West Sea is 89.44 hm² at a discount rate of 4.5%. Area of West Sea must be maintained at a minimum of 44.52 km² so that the social well-being can be maximized. Under low discount rate, 2%, the TAACR is zero. Even with high discount rate, 8%, the optimal reclamation area is 157.97 hm², about 35.83% of the total planned area.