The basic issue is this...the PAF needs a strike capable platform. The F-16s will accompany said new platform for offensive missions as escorts (as they have for the JF-17 and Mirage). ACM Tanvir had settled on the FC-20, and we bailed on it due to a lack of funds. If anything, if there's really a new jet on the way, it'd be J-10CE.
And there are some common sense reasons for the J-10CE too, besides having the lowest sticker price. For one, immediate integration with a Chinese supersonic AShM, and probable help for H2/H4 and Ra'ad integration. Can also pool PL-15E and PL-10E orders for Block 3 and J-10CE in one big bucket.
And no redundancy in the future with Azm, which would be in a different class entirely (twin engine, stealth, supercruise, etc).
In 2016, Jane's said the PAF's interim fighter (ahead of the FGFA) had boiled down to the J-10 or Su-35.
Now, as broke as Pakistan is, I do think Beijing would extend an EXIM loan for the J-10CE, as they probably had for the Type 054A/P and Hangor. And to be frank, with CPEC's private investment, Pak has some leverage to ask for discounts and credit for it has to guarantee ROI on CPEC projects.
This is one of those situations where either (1) China isn't really ready to sell the J-10CE or (2) like the Hangor and Type 054A/P, both sides will spring a contract out of nowhere.