1) Later blocks of JFT having the same avoinics isn't disputed. That's almost a known reality. But these avionics don't change the "class" of this jet. The PAF's main adversary is the IAF and the IAF is modernizing her fleet with heavies day in, day out. So the PAF, although is very happy with the JFT and all, can seriously use the FC-20's capability and once and for all. bridge that serious gap. They'll go from JFT being a "light weight fighter" to a "advanced medium, multi-role platform" which would do it for the PAF for decades to come. And they can produce various advanced versions of this jet as times change.
The beauty is that the FC-20 will not only bridge the gap that exists in the PAF's squadrons, it'll allow them to independently form their OWN high-lo tier, without the issue of the Indian lobby or sanctions. FC-20 and the JFT Block II / III are a great hi-lo combo. Add supplemental F-16's block 52/60's, you've got a seriously capable air-force and dealing with the Rafale's, Mig-29 SMT's or the SU-30's won't be a huge challenge. This last sentence ALONE is why Pakistan SHOULD want it.
2) Engines aren't an issue. The Chinese engines, just by looking at the pictures, show me they are copying Western tech. So their engine may not be as durable and efficient as the GE or PW one's, but if they achieve 80-85% of the capability, that's massive. I think their engine design shows they have or soon will. So the engine issue is taken care of.
3) For Pakistan, all these things are much beneficial as the Chinese have spent billions in R&D and taking pains. Pakistan gets an end product at a much nicer rate and can then build up her industry from today onwards.