I seriously doubt this interpretation "merging two projects to one" regardless how close China and Russia are.
China is not going to give up the independence of own engine building capability, regardless cooperation with whom. If there is going to be a merging, China will make sure to be able to freely utilize every bits of technology in that merged product in later development. That is although a 50/50 joint venture, China will have 100 right to use the outcome. China does not mind if Russia acquire 100% right as well (to be fair, Russia should), but China must. Question is, does Russia accept this kind of deal? What do you think?
Another thing is, China has employed MTU in CJ-1000AX who may continue in CJ-2000. There is IP issues involving Germany. The designs (PD and CJ) may be different in many areas. Is China going to give up what's learnt in CJ-2000 to continue finance PD-35 path? I seriously doubt. If China and Russia decide to incorporate CJ-2000's tech in the merged product, is it ok with Germany?
My interpretation of the agreement between Russia and China is that China invests in PD-35 program (which I have heard from Chinese BBS as well). But PD-35 and CJ-2000 remains separated tracks. This works for both sides, everyone owns the portion of right to PD-35 according to the share of involvement.
Your interpretation is actually pretty close to what I was thinking, just saying that I think civil projects like the CR929 would likely use a combined common design for economies of scale of production and maintenance of civil aviation fleets, while the nation specific projects like the PD-35 and CJ-2000 would continue on at the same time especially for military related projects.