That section is talking about risk — saying that they're now producing a lot more research around novel engines than the US. It's not saying that their own engines are ahead yet, just that risk is high given current progress.
(and they are now producing their own engines, as seen on their new fighters, though they aren't believed to be ahead yet.)
They do lead in many areas now. They have a lot of engineers, hands-on manufacturing heft at scale (inc. a lot of internal competition), and a government that has been pumping and subsidising physical industries for many years.
China can’t produce it own jet engines from scratch. The engine on the jet fighters are made on Western tooling machine and have components imported from the West or Russia.
Will China eventually catch up? Absolutely.
But I’d temper any fear of China pulling ahead in research when they can’t even put today’s technology into full production.
https://www.aspi.org.au/report/aspis-two-decade-critical-tec...