I don't feel qualified to say decisively that Karnad's statement is untrue, but I suspect he might be oversimplifying the technology transfer described by political scientist Jonah Blank in a Foreign Affairs piece from 2015:
Pakistan has provided China with access to U.S. and other Western military technology that Beijing’s scientists have then reverse-engineered. During the later stages of the Cold War, much of this covert technology transfer was tacitly permitted by the United States, as a way of solidifying its own budding relationship with Beijing and putting pressure on the Soviet Union. In 1982, for example, the Central Intelligence Agency warned that if the AN/ALR-69 radar warning system was sold to Pakistan as part of the F-16 fighter jet package, the United States should expect Pakistan to transfer this sensitive technology to China. Ultimately, the sale was approved.
I'm not finding evidence that China ever actually came to directly possess an actual and complete F-16, and the following passage from the same article seems to imply otherwise.
When the United States began selling F-16 fighter jets to Pakistan in 1981, China was particularly interested in gaining access to a top-of-the-line aircraft that had previously been offered to only the very closest U.S. treaty allies (notably consisting of NATO partners and Japan). F-16 avionics and other associated technology have continued to be of such great interest to China that the United States, in order to decrease the risk of technology transfer, has insisted that some of Pakistan’s more advanced F-16s be segregated from other parts of air bases where Chinese technicians have access. Even further, Washington has insisted that particularly sensitive upgrades and maintenance be performed at sites outside of Pakistan entirely. Perhaps the highest-profile episode of suspected U.S. aviation technology transfer to China by way of Pakistan happened in 2011: following the raid on Abbottabad that killed al Qaeda head Osama bin Laden, U.S. intelligence officials charged that Pakistan’s spy service granted Chinese military technicians access to a downed Black Hawk helicopter and permitted them to take samples of the aircraft’s skin, which contained state-of-the-art stealth technology.
Mentions of China directly obtaining an F-16 are conspicuously absent from this article and other relevant sources.