Doesn't seem to me this is a step towards China growing into the preeminent power. More like a small step toward autocratic rule and a cult of personality.
Xi is a fine leader — I don't believe problems would start with him. More so his successor who may have decades of rule.
Yes, this is the story everywhere. It all works this way, until you get old, and your kids think they have a right to the throne and being a old parent you usually have to yield. Also decades of rules would have weakened most institutions who could likely stop this from happening. Then you use military etc to suppress any dissent. And then you have a dynasty in making.
Xi is a fine leader — I don't believe problems would start with him. More so his successor who may have decades of rule.