The 13th Five-Year Plan Period (2016-2020) is the final rush time for China’s poverty relief. At the present stage, our main task in developing socialism is to realise our first centenary goal: building a moderately prosperous society in all respects by 2020. Targeted poverty alleviation is a pillar of China’s new and innovative anti-poverty and development strategy. It is the key to implementing the moderate prosperity program in an all-round way. Addressing relative poverty is a key focus of China's post-2020 poverty alleviation campaign. Currently, quantifying and verifying the policy implementation effect is helpful for optimising resource allocation, implementing differentiation support, and promoting the establishment of mechanisms to address relative poverty. This is important for the promotion of the targeted poverty alleviation strategy and the implementation of the rural revitalisation strategy. This study chooses Pengyang, a poverty-stricken county located on the Loess Plateau, as the study area. The study relied on the approach of Alkire and Foster to measure multidimensional poverty, and used PSM to analyse poverty reduction effects. The main conclusions were as follows: (1) The Pengyang county has achieved remarkable results in targeted poverty alleviation and multi-dimensional poverty reduction. The index number of multidimensional poverty, k, decreased by 51.66%. (2) The poverty reduction effects varied from different dimensions, which were (from high to low) life, assets, housing, income, education, and health dimensions. (3) Based on the poverty reduction effect, this paper analyses the poverty alleviation plight of Pengyang county and proposes further research on its optimisation strategy. These new strategies could enable the resolution of problems from the root, such as providing public goods and services that fill gaps in the current health care, housing options, and the operation of transport facilities at the village level. This could help mitigate welfare loss by farmers and reduce the negative impact on health, housing, education, and other dimensions of poverty. Finally, we put forward the corresponding suggestions on the establishment of the mechanism of relative poverty.