The fighter, the J-31, made its maiden flight on Wednesday in the northeast province of Liaoning at a facility of the Shenyang Aircraft Corp which built it, according to Chinese media.
"This is the second entirely new fighter design that's emerged from China in the last two years, which suggests a pretty impressive level of technical development, and puts them ahead, certainly, of all their regional neighbours," said Sam Roggeveen, a security expert with the Lowy Institute in Sydney.
The Chinese military "has been extremely deliberate, well-funded and persistent, and it's starting to bear fruit", Roggeveen said.
"What you're now seeing since the early '90s is the slow emergence of a first-class regional military power."
China's Defence Ministry did not respond to a request for comment.
China's previous stealth fighter, the J-20, is a heavier aircraft and believed to be less manoeuvrable than the J-31.
China's military capabilities lag far behind those of the United States, but China is seeking aggressively to boost its strength, including launching its first aircraft carrier - purchased from Ukraine - in September.
The build-up is a worry for neighbours uneasy about China flexing its military muscle, especially in territorial disputes with Japan in the East China Sea and with Vietnam and the Philippines in the South China Sea.
"Just like the U.S. F-22 and F-35 fifth-generation fighters, the J-20 and J-31 will complement each other during future operations," Bai Wei, former deputy editor of the weekly Aviation World, told the Global Times newspaper.
"The J-31 is almost certainly designed with the intention to have the potential of operating on aircraft carriers, judging from its enhanced double-wheel nose landing gear and two big tail wings, which help increase vertical stability," Bai said.
China needs both the heavier J-20 and more nimble J-31 to defend its air space, Bai said.
The J-31 is a mid-sized fighter using Russian-made engines which will later be replaced by Chinese engines, the Global Times reported.
"The big Achilles heel for Chinese aerospace generally, and particularly for both of these two programmes, is engines," Roggeveen, a former analyst for Australian government intelligence and editor of the Lowy Institute's blog LowyInterpreter.org.
"They still rely very much on foreign technology, and their progress on developing domestic high-performance engines for combat aircraft has been frustrating and slow," he said.
While the J-31 and J-20 will add to China's offensive as well as defensive capability, "it will take many, many years" for them to enter service with the air force, Roggeveen said.