<p>Persistent eutrophication and harmful algal blooms (HABs) have raised substantial concerns regarding anthropogenic nutrient enrichment across China. Nonpoint source (NPS) nutrient fluxes, which account for a major proportion of nutrient loads nationwide, remain inadequately managed due to deficits in rural infrastructure. Lake Taihu, China’s third-largest freshwater lake, exemplifies these governance challenges. A range of non-structural approaches has been successfully implemented to control nutrient release from the livestock and aquaculture sectors. However, control measures targeting cropland remain limited. This is primarily because China’s agricultural sector is dominated by smallholder farms, which have constrained economic capacity to adopt pollution control technologies. Additionally, cropland conservation policies hinder the government from rapidly scaling down farmland areas. A key constraint is that traditional environmental governance frameworks often neglect tradeoffs between environmental protection and socioeconomic livelihoods. To address this gap, a multi-objective framework based on the NSGA-II method is explored to optimize the application of best management practices (BMPs). Nevertheless, the lack of clear numerical NPS nutrient load standards and data gaps in rural areas continue to undermine the utility of this smart watershed management tool. To enhance environmental governance effectiveness, sustainable fiscal mechanisms should be prioritized, paired with coordinated frameworks to facilitate farm consolidation and improve economic viability. Furthermore, we propose exploring a community participation mechanism to mitigate the socioeconomic pressures associated with NPS nutrient management policies.</p>