Authorities in China’s northeast provinces have issued guidelines to protect their low-income populations – including farmers and small-business owners – from falling back into poverty, as the latest coronavirus outbreaks put the livelihoods of people in financially vulnerable regions at considerable risk. Liaoning province and neighbouring Jilin province , the epicentre of the country’s latest Omicron wave, vowed assistance on Wednesday to those teetering on the brink of poverty. This highlights the economic ramifications of China’s zero-Covid policy, which it is sticking to even while wrestling with its worst outbreaks in more than two years. Strict pandemic controls have restricted mobility; weighed on client demand; crippled the manufacturing and services sectors; slashed small-business earnings; and now risk delaying the spring ploughing of fields in the northeastern breadbasket. The disruptions stemming from Beijing’s zero-Covid goal also threaten to undo the efforts of President Xi Jinping’s poverty-eradication campaign , which China’s leadership last year hailed as an achievement “unseen in human history”. China announced in February last year that it had lifted nearly 800 million people out of poverty in the past four decades, accounting for 75 per cent of the world’s progress during this period. And now Beijing is looking to protect its achievement in the face of unforeseen headwinds, with vows to keep people above the poverty line by improving agricultural infrastructure for farmers; helping specific groups find jobs or learn new skills for employment; preventing mass unemployment; and other direct financial support, according to the annual report of the National Development and Reform Commission, the state planner. “It’s a great responsibility to ensure that previously destitute households do not return to poverty due to the pandemic,” a report in the Liaoning Daily said on Wednesday, citing the Liaoning Ministry of Rural Revitalisation. “The complexity and difficulty of pandemic prevention and control in our province have had extremely adverse effects on rural production, labour migration, and agricultural product sales.” ‘Rigid, crude’ lockdowns only choice for China’s poor regions under zero-Covid Provincial authorities in Jilin said they will offer small loans; transport subsidies to migrant workers of up to 1,600 yuan (US$250); and subsidies to local companies hiring low-income workers. Additionally, there are plans to streamline the process for local farmers to sell their products. Authorities from Changchun, the capital of Jilin, also said on Monday that 200 yuan (US$31.50) will be given to 45,000 low-income households and about 9,000 poor residents, in addition to care packages containing vegetables and some medical supplies. Jilin has been one of the hardest-hit regions in the current Omicron wave, with infections soaring for nearly a month. The province of 24 million people has reported more than 60,000 cases since mid-March, accounting for more than a third of the country’s new cases. Despite the cases clustering in its capital Changchun and the city of Jilin, local authorities have effectively locked down all cities, counties and villages, in line with the nation’s zero-Covid strategy. “Businesses are forced to suspend operations when pandemic-control measures impose shutdowns and lockdowns, and the worst affected are the workers,” said Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank connected to the provincial government. “Everyone knows it, but no one has a solution.” Activity in China’s services sector contracted at the steepest pace in two years in March, the Caixin services purchasing managers’ index showed on Wednesday, with contact-intensive services sectors such as transport, hospitality and catering bearing the brunt of the impact. ‘It’s a headache’: China’s local officials grapple with ‘common prosperity’ Amid rising uncertainties both domestically and abroad, Beijing has repeatedly warned of the risks of a massive return to poverty, and has pledged preventive measures. “Zero-Covid would not have been necessary if China had been able to develop a better vaccine , or been willing to buy foreign vaccines,” said David Zweig, professor emeritus with the Hong Kong University of Science and Technology. “So, this policy – which worked well for the first two years, but is now in trouble and probably will be killing many older people or dramatically slowing the economy – is a problem of China’s own making.” Zweig added that “ common prosperity has been put on the back-burner”, but when the economy recovers somewhat, he expects Xi will “pull it out of the policy drawer and resurrect it”. As tax revenues fall, a lot of funds previously used in poverty-alleviation projects will be redirected to fill the fiscal holes Zhuang Bo, economist In the long-term, the pandemic alone is not likely to undo the poverty-reduction progress that China has made over the past few decades, as the country will continue to prioritise “common prosperity”, but in the short term, more people will inevitably fall back into poverty, according to Zhuang Bo, a China economist at investment firm Loomis, Sayles & Company. “Local government expenditures on pandemic control will ramp up, and as tax revenues fall, a lot of funds previously used in poverty-alleviation projects will be redirected to fill the fiscal holes,” he said, adding that many small-business owners are struggling to stay out of poverty as their limited savings go to expenses such as rent while they receive no new income. Poverty alleviation has been a long-term goal for the party since it took power in 1949. And the country invested nearly 1.6 trillion yuan in poverty alleviation since Xi came to power in late 2012, according to Xinhua. As Beijing declared victory in its task of eliminating extreme poverty, it turned its attention toward addressing social and economic inequality, with the goal of achieving common prosperity by 2050.