Footage on state media showed people at a bus stop running from the collapsing road, as the bus – jutting into the air – sank.
Several people disappeared as the sinkhole spread, including what appeared to be a child. Sixteen people were taken to hospital.
The incident, outside a hospital, also triggered an explosion inside the hole, video showed.
Search and rescue work was under way and the cause of the accident was under investigation, the state-run CCTV broadcaster said.
The incident occurred at 5.30pm on Monday in Xining, the capital of Qinghai province, CCTV said.
Sinkholes are not uncommon in China and are often blamed on construction works and the country’s rapid pace of development.
In 2016 at least three people fell into a huge sinkhole in central Henan province, which swallowed a section of road and passersby.
An initial investigation showed the collapse might have been caused by water pipes under the road breaking up due to the rain.
In 2013 five people died when a 10-metre-wide sinkhole opened up at the gates of an industrial estate in Shenzhen.
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