A group of knife and sword-wielding attackers, dressed in black, burst into the station in Kunming, the tranquil capital of south-west China's Yunnan province last night and began stabbing and slashing people at random.
Images from the scene posted online showed bodies lying in pools of blood at the railway station.
"It was an organised, premeditated violent terrorist attack," state-run Xinhua news agency reported, adding that police shot at least four suspects dead. Over 10 "terrorist suspects" were involved in the attack and police are hunting for the rest, it said.
Evidence at the crime scene showed that the attack was orchestrated by Xinjiang separatist forces, the municipal government of Kunming said today.
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TV footage showed police recovering swords carried by some of the members of the group.
It is the first time militants from the banned East Turkistan Islamic Movement (ETIM) from Xinjiang have been blamed for carrying out such a large-scale attack so far from their remote homeland. It follows an incident in Beijing's iconic Tiananmen Square in October which shook the country's Communist leadership, forcing them to establish a state committee to ensure national security.
Last year three members of a family including two men tried to carry out an attack at the Forbidden city near the Tiananmen square here. Four people were killed in that attack.
Xinjiang, which borders Pakistan-occupied Kashmir (POK) and Afghanistan, witnessed several violent attacks by the militants stated to be from ETIM, an al-Qaeda linked group fighting for independent Xinjiang.
For several years the province experienced ethnic unrest between native Muslim Uygurs and the Han national from the Chinese mainland for the past few years over the increasing settlements of Hans in the region.
Chinese President Xi Jinping has asked authorities to probe the case with all-out efforts and punish the terrorists in accordance with the law.