Authorities in the capital Beijing on Monday raced to contain a Covid-19 outbreak traced to a raucous 24-hour bar known for cheap liquor and big crowds, with millions facing mandatory testing and thousands under targeted lockdowns.

The outbreak of nearly 200 cases was linked to the Heaven Supermarket Bar, which had just reopened as curbs in Beijing eased last week.

Dine-in service at Beijing restaurants resumed on June 6 after more than a month in which the city of 22 million people enforced various Covid curbs. Many malls, gyms and other venues were closed, parts of the city's public transport system were suspended, and millions were urged to work from home.

"We have to test every day now. It's a bit of a hassle, but it's necessary," said a 21-year-old resident surnamed Cao, who runs a convenience store in Beijing's largest district Chaoyang, where the bar cluster was discovered. "The virus situation has hurt our business a bit, it's down about 20 to 30 percent."

Chaoyang kicked off a three-day mass testing campaign among its roughly 3.5 million residents on Monday. About 10,000 close contacts of the bar's patrons have been identified, and their residential buildings put under lockdown, and some planned school reopenings in the district have been postponed.

Queues snaked around some testing sites on Monday for more than 100 metres. Large metal barriers have been installed around several residential compounds, with people in hazmat suits spraying disinfectant nearby.

Last week, as dine-in curbs were lifted, Heaven Supermarket Bar, modelled as a large self-service liquor store with chairs, sofas and tables, reclaimed its popularity among young, noisy crowds starved of socialising and parties during Beijing's Covid restrictions.

The bar, where patrons check aisles to grab anything from local heavy spirits to Belgian beer, is known among Beijing revellers for its tables plastered with empty bottles, and customers falling asleep on sofas after midnight.

With the almost 200 Covid cases linked to the bar since June 9, authorities described the outbreak as "ferocious" and "explosive" – people infected live or work in 14 of the capital's 16 districts, authorities have said.

Officials have not commented on the exact cause of the outbreak, nor explained why they are not yet reinstating the level of curbs seen last month.

The bar cluster was caused by loopholes and complacency in epidemic prevention, Beijing Evening News wrote in a commentary piece on Monday.

"At a time when ... normality in the city is being restored, the fall of Heaven Supermarket Bar means the hardship and effort of countless people have been in vain," the newspaper wrote.

If the outbreak grows, "consequences could be serious, and would be such that nobody would want to see," it added.

Nationally, authorities said there were 143 local coronavirus infections, of which 69 were confirmed and 74 did not have symptoms.

Beijing reported 29 confirmed cases and 22 asymptomatic ones. (Reuters)