The Kunming attack came just days before the opening meetings of the Chinese People's Political Consultative Conference today and the National People's Congress on Wednesday.

Last October, three people died carrying out what Beijing described as a terrorist suicide attack in Tiananmen Square that killed two others and left dozens injured.

Officials blamed the East Turkestan Islamic Movement for the incident, which occurred 10 days before a crucial Communist Party meeting.

"Terrorists are using all means to create widespread social panic … across China," said Pan Zhiping, an expert on terrorism at Xinjiang Social Science Academy. "The timing of the Kunming attack implies the terrorists want to create the biggest impact possible.

"Security is tight in Beijing and Xinjiang and in their surrounding provinces, but Kunming, a city thousands of kilometres away … is less defended. Nobody could have predicted an attack would be staged there."

Eoin Treacy's view

Events unfolding in Ukraine have stolen headlines, but the mass murder that shook China over the weekend represents an escalation of the terror campaign that many associate with Xinjiang separatists.

The Communist Party’s claim to legitimacy rests on its ability to deliver social stability and improving standards of living. It is reasonable to expect that anyone who wishes to damage the Party would look on the weekend before the opening of the annual congress as an opportune moment to act.

Policies put in place over the last few years have concentrated on enhancing the role of human capital within the economy by improving access to social services and healthcare and by investing in IT and beginning to clean up the environment. However, control over the media and societal freedoms remains as tight as ever.

The stock market rallied today following a sharp reaction last week while the Renminbi at least paused following its decline. We can expect reasonably quite markets this week as investors wait to see to what extent the administration delivers on its commitment to policy reform. A weaker currency would appear to represent at least part of the solution.  

From a broader perspective the events in Ukraine are unlikely to have more than a temporary impact on Asian stock markets. However, if oil prices continue to rally from current levels that will represent an increasingly strong headwind for markets just about everywhere.