Separatists from China's northwest region of Xinjiang have been blamed by local government for a mass stabbing attack which left 28 dead at a train station.
It said evidence from the scene of the attack late Saturday in Kunming by a group of knife-wielding people pointed to separatists from Xinjiang, a vast region home to the mostly-Muslim Uighur minority.
Victims described attackers dressed in black bursting into the station in the southwestern province of Yunnan and slashing indiscriminately.
The attack left at least 29 dead and more than 130 wounded, Xinhua said, citing local authorities.
Police shot dead at least four attackers, it said in an earlier report.
Xinjiang is periodically hit by violent clashes between locals and security forces but such attacks are rare elsewhere in China.
Beijing maintains that unrest in Xinjiang is caused by terrorist groups seeking an independent state, an account denied by Uighur rights groups who complain of widespread religious repression and economic discrimination.
President Xi Jinping called for "all-out efforts" in the investigation and for the attackers to be punished "in accordance with the law", Xinhua said.
Beijing's top security official Meng Jianzhu arrived in Kunming early Sunday and visited the scene of the attack, which came days before the opening of the annual session of the legislature, the National People's Congress, Xinhua reported.
A knife victim named Yang Haifei, who was wounded in the chest and back, told Xinhua that he had been buying a train ticket when the attackers approached.
"I saw a person come straight at me with a long knife and I ran away with everyone," he said, while others "simply fell on the ground".
Some who managed to escape were desperately looking for missing loved ones.
"I can't find my husband, and his phone went unanswered," Yang Ziqing was quoted as saying.
She said she had been waiting for her train to Shanghai "when a knife-wielding man suddenly came at them".
Officers sealed off a wide area around the station, it added, while Xinhua said police were questioning people at the site.
The attackers were dressed in similar black clothing, the official China News Service said, citing witnesses.
"A group of men carrying weapons burst into the train station plaza and the ticket hall, stabbing whoever they saw," it said.
State broadcaster CCTV called the incident a "terrorist attack" on its Weibo account.
President Xi and Premier Li Keqiang sent condolences to the victims and their families.
Photos posted on Sina Weibo showed blood spattered across the station floor and medical staff crouching over bodies lying on the ground, although the authenticity of the images could not be verified.
The photos showed crowds gathered outside among police officers and ambulances. The injured had been delivered to hospitals around the city, local television station K6 said.
A Weibo user going by the name HuangY3xin-Dione who was at a restaurant near the scene told how she saw a group of men in black with two long knives chasing people, Xinhua reported.
Another eyewitness told the Beijing News that she had seen two women in black walking towards the station and that some of the attackers had their faces covered.
Incidents involving Uighurs are often labelled "terrorist attacks" while others carried out by Chinese seen as having grievances against society or the authorities are not.
In a high-profile incident in Beijing last October, three Uighur family members set their car on fire at Tiananmen Square, the symbolic heart of the Chinese state, killing themselves and two bystanders.