Probably an exaggeration. I find it hard to believe this story because they claim the RCS is greater than J-10C. Even a clean J-10C doesn't have shaping optimised for stealth. At the very least (assuming materials are same between the two), J-31 has shaping that's supposedly more conducive to reducing RCS. It also has more of less equal worksmanship. Considering this, how could the J-31 have higher RCS than a 4th gen fighter unless they intentionally sabotaged the design and material selection.
Assuming it is true, there is no chance it will win any tenders. Nor should a sub par product be given any attention. If proven true, it would seem that there is some high accountability in Chinese procurement procedures which would likely indicate that J-20 is indeed quite the satisfactory product, as the recent literature is suggesting. Since the source of claim is unknown and unsubstantiated, don't see good reason to believe it until more evidence comes out.