Precisely because the locomotive have a monopoly on the medium -- rails, and precisely because this medium have far less structural and construction requirements and less time to build than a road over the same distance, rail of whatever speed to transport volume of people and cargo is the best thing China could invest in in order to provide economic growth.
But just like the American countryside once towns and cities became established, businesses always diversifies and once they do, the locomotive's limited flexibility to deliver smaller volume of people and cargo will manifest. Once you delivered larger volumes of cargo to X destination, how else are you going to deliver smaller volumes of cargos? Smaller rails and smaller locomotives? No, you need other modes such as horse drawn carriages or even people pulling carts. Then eventually the car showed up.
China cannot escape this progression.
In California, we still operate metro link, thousand still ride the metro rail to work in Los Angeles, you don't have to stick in traffic during rush hours by riding the train. Many people take public transit for many personal reason also for economical reason. Travel by train is another option for the population to use as their chosen. Speed rail is just another way to move people around the country and it's way cheaper compare to travel by air. Travel time isn't much different when you compare a person stuck in the airport for check into their flight to the slower speed travel by train, both way to travel will allow a person to reach their destination 1 or 2 hrs apart. In a short distance or travel around city block or town, travel by car is more convenient and have more freedom to move around all part of the city.