In my experience (and I freely admit this is purely subjective), the term “literary fiction” is used as an academic bludgeon by people who sneer at certain styles of fiction, in particular SF, fantasy, and horror (but not only those). There is, however, no coherent definition of the term I’ve ever seen.
For instance one definition you’ll see includes “based on real-life”. Yet Naguib Mahfouz is regarded as a “literary fiction” writer, despite half his oeuvre consisting of obvious fantasy (Children of the Alley and Arabian Nights and Days for starters). Iain Banks (as opposed to Iain M. Banks, who is the same person but the “M.” means he’s wearing his SF author hat) is also a “literary fiction” writer … yet his works are full of fabulism.
One could argue that “literary fiction” is more a set of descriptive priorities (character, theme, style, psychology, the “human condition”) etc. than it is an identifying checklist and as such genre works could be literary, and non-genre works could fail as literature as well.



An abridged version would be losing what makes this novel so important to Chinese culture. The story of 红楼梦 is not the most important point (though it is important). It’s whose eyes the story is told through, his interactions with the people around him, and the daily life that reveals it that matters.
If you have ever read any kind of “fall of a family” style of story you already have read A Dream of Red Mansions. You might as well not bother with an abridged edition. The value of the novel lies precisely in the stuff that would be elided away by an abridgement.
This is a very big, very heavy, very deep novel. (How deep? You can get university degrees in just this novel in China.) And you’ll be reading it through the haze of translation and of cultural confusion. It will not be an easy read even if you get an excellent translation that’s stuffed to the gills with explanatory footnotes. (Like, for example, the poetry won’t resonate … and there is a lot of poetry in the story!) I can’t tell you if it’s worth reading because I’m not you. I can warn you, though, that reading it will be work, not light passing fancy.