Rebuilding China's devastated earthquake zone will be a long and arduous process, the government has warned, in an ominous signal to millions of survivors living in tents that there will be no quick fix to their upturned lives.

Infrastructure problems - from rehousing entire townships destroyed by the quake to digging channels to divert blocked rivers - are among the most pressing for officials more than two weeks after the disaster.

In addition to trying to house some five million people left homeless by the May 12 quake, officials say hard-hit Sichuan is still unstable and the conditions are hampering recovery and reconstruction efforts.

"We are racing against time to repair damaged infrastructure," Mu Hong, a deputy director at the National Development and Reform Commission, the country's top economic planning body, told reporters on Wednesday.

"The high risk of mudslides and landslides makes our efforts more difficult."

The magnitude 7.9 quake sent dirt and rocks tumbling into valleys, blocking roads and clogging rivers that have developed into fast-rising lakes behind the impromptu dams.

Some 158,000 people have been evacuated from downstream of the largest of the quake-spawned lakes, which officials are rushing to drain before it breaks through the dam wall and floods the valley below.

Workers, including thousands of troops sent to the disaster zone, are also in the early days of clearing the rubble before rebuilding can begin.

In shattered towns, explosives and backhoes are being used to tear down damaged buildings and pile up the detritus.

"Due to the immense magnitude of loss resulted from the quake, production recovery and reconstruction of the quake-hit region will be arduous in the near future," the commission said Wednesday in a statement.

Officials have said they expect it will take at least three years to rebuild.

The number of confirmed deaths from the quake climbed toward an expected toll of more than 80,000 on Wednesday, with China's Cabinet saying 68,109 people were killed, with 19,851 still missing.

At the newly formed Tangjiashan lake, about three kilometres upstream of the devastated town of Beichuan, hundreds of soldiers laboured for a third day to build channels to divert the fast-rising waters.

Premier Wen Jiabao China's Cabinet that handling the danger from the swelling lakes was the "most pressing task" in the disaster recovery effort, the official China Daily newspaper said.

The government has allocated 200 million yuan ($A29.73 million), to deal with the problem, Xinhua said. Of 34 lakes created by the earthquake, 28 were at risk of bursting, the agency said.

The entrance to Beichuan was blocked by soldiers Wednesday. A sign erected on the quake-buckled road leading into Beichuan said: "Completely restricted area. Absolutely no entry."

A medical team wearing masks milled around nearby. Soldiers were levelling ground at a safe distance from the river bed and pitching tents, apparently for evacuees.

Heavy-lift helicopters flew overhead, including one dangling a bulldozer from its cable.

Yang Hailiang, the official heading the Tangjiashan operation, said teams working around the clock had completed one-third of the work they needed to drain the lake, Xinhua said.

Downstream, evacuated villagers were making do.

At riverside Tongkou village, residents were moved to a camp 70 metres up a hillside but still climbed down to the river basin each day to tend rice fields and vegetable crops. They said officials promised to signal them in time to flee if the dam breaks.

"If the water comes down from the burst dam, somebody will launch a fireworks signal to give us warning so everybody can run uphill," said villager Wang Hongyun. "Without seeing the warning, we will keep on gathering our crops."

Others were preparing for a long stay in temporary housing.

"When we are able to go back to our home village we will still have to live in this kind of tent for some time," said Wu Shida, whose village of Huangshi was emptied by soldiers this week because of the flood threat.

They are now living in a camp near Jiangyou town. "I don't know how long but best hope will be till the end of this year."