China said they will not create security imbalances, rather solve them.J-35/J-31/J-XY will be the first world-class military aircraft China offers to the world. It will be technologically advanced and relatively expensive too. It would also represent a milestone of sort in China's arms export.
It's the first aircraft that has been conceived and designed from start for both Chinese military and export market. It will be at the cutting-edge of what China needs and what much of the world militaries desire.
We've seen that China has steadily exported more advanced defense platforms these days, many of them currently in service with PLA, including 054A, 039, J-10C, as well as a whole suite of missiles and munitions. J-35/J-31/J-XY would be yet another step up. It would significantly raise the profile of China as a major arms exporter.
But the sales of an advanced stealth aircraft would have strategic and geopolitical implications. The potential customers and market are therefore rather limited. China's traditional arms clients are mostly third-world developing countries, such as Pakistan, Algeria, Egypt, Thailand etc. For more advanced and expensive equipment such as J-35/J-31/J-XY, you need relatively wealthy clients. Take into account all the international politics, Middle East countries are probably the most likely and promising targets. We know UAE has suspended the purchase of F-35 from the US due to the latter's intervention into UAE's relationship with China. Saudi Arabia is yet another traditional customer for Chinese arms (missiles, drones etc.) and appears to expand the scope of their arms import from China lately. Saudi Arabia and other Middle East countries, are also in the process of rebalancing their relationship with the US/West and starting to tilt more towards China and the East. It's not difficult to imagine they would consider more advanced arms purchase from China to strengthen the relationship. Finally, Iran might also be a customer in the longer term.
Meanwhile, the ongoing Russia-Ukraine war and the relatively poor performance of Russia military may also have negative impact on the prospect of future Russian military export with some of its traditional client countries.
All these bode well for the prospect of future J-35/J-31/J-XY export and it would be wise for China to invest more efforts to developing and cultivating these relationships.
What I think this means is they would not sell J-35 to Pakistan for example, because those countries aren’t really threatened by fifth gen’s. If India got the F35 then the sale would happen, to balance the security situation.
Saudi, and the GCC are very much threatened by F-35s in their neighborhood, hence the vital need for J-35 to balance the security situation, a key tenet of the GSI.