Both. The capacity needs to handle peak traffic during holiday season, so if you travel at a less busy time, you can easily end up in an almost empty train car

Both. The capacity needs to handle peak traffic during holiday season, so if you travel at a less busy time, you can easily end up in an almost empty train car with several empty rows of seats between each passenger. AFAIK, except for Beijing-Shanghai and maybe a few others in the wealthy, densely-populated east, most connections are operating at a loss. Connecting all the western provincial capitals was definitely just a prestige project. But it did accelerate the economy for places that are now a lot more convenient to reach. I doubt that it's enough to justify the enormous construction costs, but it's also not nothing.