The 3-4 years number is based on an optimistic projection where they pinky-promise they'll have the fist flight by 2028. And that's just the first flight watermark.
China’s ability to bring its first fifth generation fighter, the J-20, from its first demonstrator flight to service entry in just six years drew a highly unfavourable precedent when compared to the F-35 and F-22, which both took 15 years, and indicates that the country could begin fielding sixth generation fighters close to a decade before the United States.
Everyone knows by know how China controls 80% or 90% of rare earth processing, but as you point out they consume internally 80% of that.
The funniest thing is the Trade War™ offered a perfect opportunity to further tighten the export controls of rare earths, which is what China wanted anyway, to satisfy the domestic consumption.