Now it feels like it was just lack of competition. Maybe now other countries will start producing lines and trains capable of 400 Kph and hopefully its not a China only thing going forward.
While it is technically proven that it is possible to do 400+km/h on rail, it's not practical: maintenance, wear, noise, turns, embranchement, and overall cost, ... many considerations that are probably less important for Chinese railway now, which needs some "show".
So running a train at 350kph is more expensive than 300kph, both in per-distance and pre-unit time terms. But if you can run more services that way then sufficient demand might make it economical. Also, if it's too slow, people may choose flying instead.
Maglev can go even faster but those have never been made economical, really. It's much more complicated and expensive.
It's a bit like how commercial planes have actually gotten slower. 747s used to fly closer to Mach 0.9. Now most commercial planes fly at around Mach 0.8. There are physical problems flying between Mach 0.8 and 1.2 but sometimes that doesn't matter so the best private planes top out at about Mach 0.93. Even then they rarely fly that fast.
Flying an aircraft at max cruise can save a lot of time on longer flights, but it's also substantially more expensive.
of course the above is all about compromise and you can emphasize whatever numbers you want to get different results.
Edit: it is often a good idea to have everything capable of faster speeds - say 350km/h. You don't normally want to use those speeds, but if a train gets delayed (as happens) you can use that extra speed to make up time. Just don't let this become a normal thing.
No idea how much the wings would add versus the lift help.
the wings on race cars are poited down - they increase weight to keep the car on the ground at the expense of more drag, which they overcome with a bigger engine (and more fuel use)