Beijing warned on Monday that it was facing its most severe test of the Covid-19 pandemic, shutting businesses and schools in hard-hit districts and tightening rules for entering the city as infections ticked higher in the capital and nationally.

China is fighting numerous Covid flare ups, from Zhengzhou in central Henan province to Chongqing in the southwest. It reported 26,824 new local cases for Sunday, nearing the country's daily infection peak in April.

It also recorded two more deaths in Beijing, up from one on Saturday, which was the mainland's first since late May.

Guangzhou, which is battling one of the largest of the recent coronavirus outbreaks, ordered a five-day lockdown for Baiyun, its most populous district. It also suspended dine-in services and shut night clubs and theatres in the city's main business district.

The latest wave is testing China's resolve to stick to adjustments it has made to its zero-Covid policy, which calls for cities to be more targeted in their clampdown measures and steer away from widespread lockdowns and testing that have strangled the economy and frustrated residents.

Asian share markets and oil prices slipped on Monday amid investor concern over the economic fallout from the intensifying pandemic on the mainland, with the risk aversion benefiting bonds and the US dollar.

Beijing reported 962 new infections on Sunday, up from 621 a day earlier, and a further 316 cases for the first 15 hours of Monday.

Authorities in the capital said people arriving there from elsewhere in China would need to undergo three days of Covid testing before they are permitted to leave their homes or accommodation.

"The city is facing its most complex and severe prevention and control situation since the outbreak of the coronavirus," Liu Xiaofeng, the deputy director of Beijing's municipal Centre for Disease Control and Prevention, told a media briefing.

Residents in Beijing's sprawling Chaoyang district, home to 3.5 million people as well as embassies and office complexes, were urged to stay home, with schools going online.

Streets were unusually quiet, and stores in the district other than those selling groceries appeared mostly shut.

Restaurants were empty but for one or two staff huddled at entrances around small tables showing "takeout only" signs.

"You can't go anywhere. Everything's closed. Customers cannot come, either. What can you do? You can do nothing," said Jia Xi, 32, a medical industry salesman. (Reuters)