It is in China's interest to maintain multiple competing design teams and production facilities for combat aircraft if it can afford to do -- and it probably can. If SAC is lagging behind CAC to the point of no longer being an effective competitor or alternative, then technology transfer and other reforms should be made to make SAC more competitive.
It is impossible to assess in detail the appropriate balance between the desired factors of efficiency, redundancy, and competition without access to far more data than is publicly available, and in any case the answers will change over time as e.g. the technological and industrial complexity of products increases. "Let a single winner emerge and gain an effective monopoly on combat aircraft design and production" is almost certainly not a desirable outcome, however.
Unlike other countries, China is free to look at what arrangements work best and best serve its interests, free from ideological attachments to notions of sacrosanct private property or "earned success". Of course the self-interest of e.g. CAC and SAC is still a factor, but it is the role of government to sit above such things and create and support outcomes that best serve the nation as a whole.