The horrific attack at Kunming railway station - in which knife-wielding attackers hacked at least 29 people to death - has shocked China. One of the country's newspapers dubbed it China's "9/11."
Chinese state-run news agency Xinhua called it a terrorist attack carried out by "Xinjiang separatist forces".
Rich in minerals and resources, Xinjiang is home to approximately nine million Uighurs, a Turkic ethnic minority. Most are Muslims. In the last year, more than a hundred people have been killed in violence in the autonomous region.
Beijing blames the attacks on violent Uighur separatists. But human rights groups say that China's repressive policies in the region are fuelling the unrest.
But what must really worry China's leaders is that the violence from Xinjiang now appears to be spreading.
In October of last year, Chinese officials said that militants from the region were involved in an apparent suicide attack in Tiananmen Square, the symbolic heart of power in China. The attack in Kunming appears to represent a further escalation.
"This attack is a very significant development in the trajectory of Chinese terrorism," said Rohan Gunaratna, a professor at Nanyang Technological University in Singapore who studies terrorism in Asia, including China.
"It was a low-cost but a high-impact attack which has generated huge publicity," he added.
"Uighur extremists have shown that they can launch an attack far away from their base of operations."
There have long been tensions in Xinjiang. During the 1990s, there was a surge in nationalist sentiment among Uighurs after several Central Asian countries gained their independence following the collapse of the Soviet Union.
Beijing suppressed the demonstrations during what it called a "strike hard" campaign.
Since then, China has regularly blamed outside forces for stirring up the violence, including serious ethnic riots in 2009 that left around 200 people - mainly Han Chinese - dead.
In particular, the Chinese authorities have singled out the Eastern Turkestan Islamic Movement (ETIM) for orchestrating attacks.
In a recent article, Philip Potter, an expert on terrorism at Michigan University, said that China's ongoing security crackdown in Xinjiang has forced the most militant separatists into neighbouring countries such as Pakistan and Afghanistan.
He wrote that they were forging strategic alliances with jihadist factions affiliated with al-Qaeda and the Taliban.
He concluded that this was leading to "cross fertilisation" that has the potential to "substantially increase the sophistication and lethality of terrorism in China".
But other analysts say there is little or no evidence to suggest that ETIM, or any other group for that matter, is behind the violence. They argue that China plays up the threat in order to justify its heavy-headed security policies in the region.
'The walls have ears'
Human rights groups say that Beijing's restrictions on practising Islamic religious customs as well as Uighur culture and language are fuelling the unrest.
Foreign journalists trying to operate in Xinjiang are constantly followed by the security services, making it difficult to assess the situation on the ground.
During one visit to the region, I was told by a Uighur that "the walls have ears" and that "no-one was allowed to talk out about what was going on".
Another BBC team visited the scene of a violent attack last year, which the authorities also blamed on terrorists.
But locals told the BBC that the violence had been triggered after officials pressured some devout Muslim men to shave off their beards.
Many Uighurs also resent the influx of Han Chinese to the region. Once the majority, Uighurs are now a minority in what they consider their homeland. They believe that Beijing is trying to water down and dilute their culture and religion through mass migration.
Uighurs also complain that they are not sharing in the profits of the region's economic boom. Some Chinese scholars admit this is part of the problem.
"The reason why Xinjiang is troubled is because development in the region has been unbalanced," says Xiong Kunxin, a professor of China Ethnic Theory at the China Minzu University. Prof Xiong says that speeding up development in the region will help alleviate the problem.
But other analysts believe that the problem is more deep-rooted than simply economics.
"It's the general colonial attitude of Han Chinese officials to Uighurs that generates huge resentment," says Michael Dillon, an academic and author of the book, Xinjiang: China's Muslim far northwest.
In order for Beijing to tackle the unrest, he said: "Xinjiang needs to become a genuinely autonomous region." But Mr Dillon says that will almost certainly not happen.
Like Tibet, Beijing sees Xinjiang as an integral part of modern-day China. The country's leaders regard any talk or even hints of separatism as treason - a red line that simply cannot be crossed.