It is a bad idea to assume Z-20 will have the same performance as the SH-60.
It uses much more modern materials and construction techniques. The engine should also be more powerful.
You might as well compare an H-6K with an H-6.
As capable as the Z-20 is likely to become, the inherent limitations of its airframe by its very nature as an S-70 derivative means it simply doesn't compare against the Ka-28 in range and payload capacity.
On the other hand, the Z-20 is a quick, high-flying and nimble beast, which is never in dispute. And like
@Icloo said, range and payload aren't everything.
The PLAN probably sees the Z-20's pros worth the trade-off, with self sufficiency no doubt being a critical factor, despite the apparent advantages the Ka-28 brings. It goes without saying the quality of its sensor suite is gonna make all the difference for the eventual Z-20 ASW.
That said, the new Ka-27M for the Russian Navy (and the export Ka-28M) with its Kopyo-A sensor suite looks to be a quite potent ASW platform with much expanded multi-role capabilities (ASuW, AEW etc.) as well:
What I find particularly interesting is its greater surface and sub-surface detection capabilities which are clearly designed to one up the USN's mainstay MH-60R --
250km and
2,624ft for Kopyo-A on the Ka-27M
vs
200km and
2,500ft for AN/APS-153 / AQS-22 on the MH-60R; and a whole host of other goodies.
Depending on how satisfied the PLAN will be with the Z-20, me still thinks the Ka-27/8M could be an option that's worth a gander down the road.