Govt has always been subsidizing rail service, way before HSR came along. It will just subsidize it some more, at least for a good long while. Right now I think their customer service priority is restoring confidence in the HSR part of the system and increasing ridership of same. Even before the accident, the ticket prices were just too high for most Chinese after they looked at the value-time-convenience tradeoffs. Chinese gov't is committed and has no choice but to fix the system and figure out how to move forward with HSR, as there's no turning back and dismantling the whole thing.