Because Pakistan seems to want to move up the value added chain, while seeking the Saudis fund it. They get done what they can, outsource what they can’t yet to Chinese expertise advising local engineers. The goal might be spin off products that can earn some revenue, as well as bring GCC countries into the Chinese ecosystem on the basis of a Pakistani platform. Pakistan as the middle man gets its defense industry funded and its inventories across all services stocked. If the Saudis are willing to fund the project, Pakistan should go for all the specs it deems necessary; performance as a fighter, as a UCAV command post, and as a launch platform for large and long range missiles from an internal weapons bay; just as the Turks would do if they got GCC funding. The Saudis get the first fully developed variants, and then once Saudi and Pakistani needs are meet, it’s a decent enough product for the export market, just like the JF-17 Block 3 is today.
Thing is, if we want to 'move up the value added chain' then we'd need to think outside of the final product, and more about the inputs that feed into it. For example, Canada will always be at the cusp of manufacturing a fighter indigenously (to around 75%+) because it wields most of the key industries, e.g., composites, aluminum, gas turbines, etc., and can tap into its industry to source the inputs. What it does
not have is a design and development front for the aircraft itself as a lot of that expertise went to the US since sinking (literally) the Avro Arrow. But if you gave the Canadian industry the mandate to indigenize the Gripen, they can do it because the means to do it is all there. They just need the OEM (Saab) to take the lead in design.
The problem with the PAF approach is that it has always been design-focused, but literally zero was given to the industrial back-end. Moreover, most of our leaders have a poor understanding of what the industrial back-end really means, they mostly just think it's the assembly plant, but don't pay much attention to the supply chain feeding into it.
It's going to sound brutal, but even with all that we have put into the JF-17,
we didn't move one inch past where we were with the Mirage III/5. In fact, we may be behind in some respects because, with the Mirage III/5 at least, we did have cadres at many, many points who knew the plane inside and out and could re-manufacture parts from scratch at home (which we did/do for the ATAR D-MRO and MRF). In fact, I'd argue that we were maybe just a step behind where the South Africans were who could manufacture new wings, tails, and front-fuselages for the M3/5 (to turn it into the Cheetah), and two steps behind the Israelis who could build an entirely new fighter from it.
The AHQ that conceived of the M3/M5 MRF and ATAR MRO facility had actually built a decent and workable groundwork to evolve from. I can argue that, perhaps, we actually moved backwards with the JF-17 because we didn't apply the lessons that we knew already from the Mirage to the Thunder.
I'll put it this way: We can keep the Mirage 3/5 going without the French, but we can't do the same for the JF-17 without the Chinese. That should really speak volumes of how far we've fallen.
Now, if the goal is to move up the value chain, then we need to focus less on the end product and more on the industries that feed into it.
Whether it's JF-17 or J-35, it's irrelevant; what now matters is, what % of Pakistani-sourced content can we feed into it, and can we increase it? To its credit, HIT actually understands this pretty well. I suspect someone there learned the lessons from the al-Khalid and ensured that Haider would run along more feasible lines. So, for example, instead of focusing on an original 'joint' design at the end of the chain, HIT picked up the VT4 as-is, and worked on local-sourcing where it could (e.g., gun barrel, electronics, and gradually other inputs). In a way, it's good news in that while PAC is faltering, we're seeing best practices emerge out of places we'd least expect, like HIT.
Unfortunately, we're lacking in so many critical and advanced industries, our ability to contribute to the J-35 is extremely limited. The JF-17 we can fare a bit better, I'm sure, but serious investment in those critical industries (aluminum, composites, and so on) is necessary first. This is why thinking at an even simpler level -- e.g., drones, cruise missiles, loitering munitions, etc -- is smarter because we can scale these out by the tens of thousands over the long-term and drive lots of private interest in supporting these outputs. Eventually, the private sector will grow large enough to start taking on more complex programs.