China blamed militants from the restive far western region of Xinjiang on Sunday for an attack at a train station on the other side of the country by knife-wielding "terrorists" in which at least 33 died, including four of the assailants, who were shot dead.

The attack, in the balmy southwestern city of Kunming late on Saturday evening, marks a major escalation in the simmering unrest which had centred on Xinjiang, a heavily Muslim region strategically located on the borders of Central Asia.

It is the first time people from Xinjiang have been blamed for carrying out such a large-scale attack so far from their homeland, and follows an incident in Beijing's Tiananmen Square in October which shook the country's Communist leadership.

China has stepped up security in Xinjiang after a vehicle ploughed into tourists on the edge of Tiananmen Square, killing the three people in the car and two bystanders. China labelled it a suicide attack by militants from Xinjiang.

Xinjiang is home to the Muslim Uighur people, many of whom chafe at Chinese restrictions on their culture and religion.

China bristles at suggestions from exiles and rights groups that the unrest is driven more by unhappiness at government policies than by any serious threat from extremist groups who want to establish an independent state called East Turkestan.

State news agency Xinhua said the train station attack, in which more than 130 were also injured, was "an organised, premeditated violent terrorist attack".

"Evidence at the crime scene showed that the Kunming Railway Station terrorist attack was carried out by Xinjiang separatist forces," it added, citing the Kunming government.

Police shot dead four of the attackers and detained one, Xinhua said, while approximate five others are on the run. It initially said five of the attackers had been shot dead.

Kunming resident Yang Haifei told Xinhua that he was buying a ticket when he saw a group of people, mostly wearing black, rush into the station and start attacking bystanders.

"I saw a person come straight at me with a long knife and I ran away with everyone," he said, adding that the attackers caught those who were slower. "They just fell on the ground."

Graphic pictures on the Twitter-like microblogging service Sina Weibo showed bodies covered in blood lying on the ground at the station.

State television showed police wrapping a long, sword-like knife in a plastic bag, amid heavy security at the station.

Chinese President Xi Jinping ordered that no effort be spared to track down those behind the attack.

Weibo users took to the service to describe details of what happened, though many of the posts were quickly deleted by government censors, especially those that described the attackers, two of whom were identified by some as women. - Reuters