Liu, a 33-year-old unemployed man, first attacked one of his neighbour with two knives and later wounded five others on a street in Hangzhou City of Zhejiang Province.
He later ran into a nearby Walmart store in Xiacheng District, where he was captured after a scuffle in which he bit two policemen.
"We noticed a topless man with two knives walking into the store and we informed the police immediately. We called all our male colleagues to come to the vegetable section where the man was wandering. Our female colleagues were evacuating customers to the office area at the same time," state-run Xinhua news agency quoted Chen Danfang, a manager of the store.
Liu is a native of Nong'an County of northeast China's Jilin Province.
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The attack, is the latest in a series of such incidents in different parts of China in which people, stated to be disgruntled or mentally unstable, attacked people at public places.
A man in a wheelchair with an apparent grievance detonated a small explosive device at Beijing International Airport last month. There was no casualty in the blast but caused much panic among the passengers.
The government is currently equipping police personnel with special equipments to demobilise such persons and disarm them in the future.