The northwestern region of Xinjiang is home to the Uighur ethnic minority.
Knife-wielding attackers, dressed in black clothes, stormed the railway station in Kunming after 9 pm, slaughtering at least 29 people and injuring more than 130, said Xinhua.
The newspaper also described the assault as an "organized, premeditated, violent terrorist attack." The state news service said that five of the at least 10 attackers had been shot dead by security forces.
The horrific event, which is now being dubbed China's 3-01, has taken China by storm.
In an article headlined "Nothing justified civilian slaughter in China's '9-11,'" the Global Times, a Beijing daily, wrote: "A nationwide outrage has been stirred. Justice needs to be done and terrorists should be punished with iron fists."
"Severely punish in accordance with the law the violent terrorists and resolutely crack down on those who have been swollen with arrogance," said China's President Xi Jinping, according to Xinhua.
"Understand the serious and complex nation of combating terrorism. Go all out to maintain social stability", he said.
Although the terror attack was generating intense interest on Chinese social media, state censors were rapidly deleting posts on the subject. On Wednesday, an annual meeting of China's legislature is set to begin in Beijing, the biggest political event of the year. Security, one imagines, will be extraordinarily tight.
Pakistan condemns the attack
Pakistan Sunday strongly condemned the barbaric terrorist attack at a train station in China's Yunnan province and extended all cooperation to Beijing in "combating the menace".
"Being themselves victims of terrorism, the people of Pakistan fully understand and share the pain of the people of China," Xinhua quoted Pakistan foreign ministry as saying.
Terrorism in all its forms and manifestations constitutes one of the most serious threats to international peace and security, a spokesperson of the ministry said in a statement. "We are ready to extend all possible cooperation to China in combating this menace."
EU condemns the attack
EU foreign policy chief Catherine Ashton Sunday condemned the Kunming terrorist attacks and sent condolences to the victims' families.
"The High Representative is appalled by the reports she has received of the significant loss of life and the many casualties caused by a mass knife attack that took place at Kunming train station in China yesterday," Xinhua quoted Ashton's spokesman Sebastien Brabant as saying.
"There is never any justification for such heinous crimes," said the spokesman.
(With agency inputs)