Since the founding of the People’s Republic of China, poverty alleviation in ethnic minority regions and groups has been an important focus of China’s developmental policies. This paper reviews the progress in alleviating the poverty of China’s ethnic minority populations, and analyzes China’s poverty reduction policies, and challenges for the future. To end the extreme poverty of ethnic minorities, the Chinese government has designed many specific poverty alleviation policies, such as the Program to Revitalize Border Areas and Enrich Residents' Lives, the Program to Support Ethnic Minority Groups with A Small Population, preferential policies for “Three Areas and Three Prefectures”, and so on. The poverty reduction achievements of minorities have been significant in relation to education, health and living standards. However, there is still a long way to go. The Chinese government needs to address the following problems for the further development of ethnic minorities: the problem of poverty returning, phasing out current poverty reduction policies and redesigning them in terms of their costs and benefits, and the low level of public services offered to the poor, and income inequality between ethnics. It is argued that China’s ethnic minority groups may have gained little from the trickle-down effect (from the market system) of China’s economic growth and, therefore, direct government assistance to them has been needed to reduce their incidence of poverty. It is also recommended that the macro-type findings in this paper be supplemented by case studies of different ethnic minority groups. A case study of the Kirghiz minority group highlights the value of this.