Earlier, AP reported quoting Xinhua that two people were killed and 18 were injured in the attack carried out by the group.
AP reported that Xinhua did not provide more details about the evening attack at the Kunming railway station in Yunnan province, and the attackers were not identified.
Local television station K6 said that several of the attackers were shot by police and that victims were being transported to local hospitals.
The state-run Yunnan News said that the men were wearing uniforms when they stormed the railway station and that gunshots were heard after police arrived.
The motive behind the attack was not immediately clear, but China has seen a number of mass stabbings and other attacks carried out by people bearing grudges against society. Pictures on Sina Weibo, the Chinese equivalent of Twitter, showed local police patrolling the station.
Bodies in blood were spotted on the ground in the pictures. Doctors were seen transporting injured people to a local hospital.
PTI quoting Xinhua reported that a Weibo user who was dining in a restaurant near the railway station said that she was "scared to death", adding that she saw a group of men in black with two long knives chasing people.
The suspected terrorist attack came ahead of the meeting of the Chinese parliament next week.
The origin of the attackers is not yet known or whether they belonged to northwestern Xinjiang province where China says the East Turkestan Islamic Movement (ETIM), an al-Qaida-linked group, is stirring up a separatist movement among the ethnic Muslim Uighurs.
Several such attacks have taken place in Xinjiang in recent months as the remote province has been witnessing ethnic unrest between the native Muslim Uighurs and Han Chinese from the mainland for the past few years.
Story developing ...
(With inputs from AFP, AP and PTI)
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