The C919, a Chinese 174 seat aircraft designed to rival the 737/A320, made it's first flight this morning. You can see a video of it here:

https://www.bloomberg.com/news/articles/2017-05-05/china-s-new-jet-takes-off-to-challenge-boeing-and-bolster-xi

Can this aircraft challenge Airbus and Boeing? The domestic market for it could be huge, but will we ever see any Western carriers order it?

I don't see why not if the price is competitive and the aircraft itself is on a par