I think it's boardering in wishful thinking to suggest China is so advanced they are using the J20 as a smokescreen for sth even better. Looking at what else CAC is doing, it would be quite amazing if they had the spare capacity to work on sth relatively simple like a naval J10 never mind sth better than the J20. And CAC is undisputed the best in China, so I really struggle to think of anyone else outdoing them at the moment.
I think what we are seeing is the result of a more open and confident China and maybe a policy shift away from using secrecy and uncertainty as it's primary deterrence to actual capacity.
When China was weaker and less advanced, the big fear was that if potential enemies found out about the PLA's true capabilities then they would be able to effectively develop and deploy counters against which the PLA can do little to respond because of the lack of resources and technology on China's part. Thus the only way the PLA could gain an advantage is to keep their developments secret and hit an enemy with a sucker punch with sth they were completely not expecting.
Now, as China is catching up technologically and economically, it seems the Chinese leadership is starting to feel more confident about China's ability to compete and adapt to any advancements potential rivals might make. Thus they are less concerned about keeping things strictly under wraps. They are still pretty secretive and are unlikely to release any detailed info, but they seem to be more willing to allow the world to know that certain things exist.
This may be the first signs of a policy shift as with greater transparency, the PLA would become a more effective deterrence and maybe even intimidation tool, much like how the US has used it's military power in diplomacy, although I think the Chinese would still be very reluctant to actually employ military power. But they may become more willing to flaunt their military power, yet you cannot flaunt sth no one else knows about.
