Generally agree with the points made in the other answers.
However, I also want to add that, even if was acceptable to the system and even if he wanted to, at a personal level, Xi does not have a child that is a credible heir. They do have a daughter, who is 31:
Xi keeps a low profile, and not much of her personal information has been revealed to the public. She studied French at her high school, Hangzhou Foreign Language School, from 2006 to 2008.5 Xi enrolled in Harvard University in the US in 2010, after a year of undergraduate study at Zhejiang University. She enrolled under a pseudonym and maintained a low profile. In 2014, she graduated from Harvard with a Bachelor of Arts degree in psychology and was thought to have returned to Beijing.
Following the 2008 Sichuan earthquake, Xi volunteered as a disaster relief worker for one week in Hanwang, Mianzhu. In 2013, she made her first public appearance with her parents at the Liangjiahe village in Yan'an, Shaanxi, where they offered Chinese New Year greetings to the locals. She has been described as interested in reading and fashion.
Here's why I don't think she could do it:
CCP mostly seems run by old guys. Their one big foray into a female leader was Mao's widow. And whatever can be said about discrediting predecessors with propaganda in Communist systems, she, according to Chang and Halliday's Mao was an exceptionally nasty and petty character.
She's too young and Communist dogma would frown on a psych degree from a Western university in a top politician. They tend to go for national engineering/scientific degrees, maybe with allowances for Marxist theory degrees.
She isn't being groomed to take over. If she were, she'd be appearing doing stuff in the public light, doing diplomatic engagements, appearing presidential. Contrast that with Kim's high-profile sister in North Korea. There is some speculation that she is being groomed to take over if needed (his kids are apparently very young, about 10), in a society that is heavily patriarchal.
So, whatever Xi's and the CCP's faults are, I don't think one can lay on them the extremely perverse notion of trying to hobble together a Communist monarchy, something that makes about as much sense put together as an honest scammer. It is only really possible in North Korea's Alice in Wonderland context, where starving people are looking for salvation by a glutton whom they literally consider as parts of a family of gods on Earth.
According to legend, a bright star appeared on the sky the night he was born
(that's for daddy Kim, not current Kim, but you get the idea. btw, apparently current Kim is finding it useful to tone down either the godhood bit or the emphasis on his ancestors rather than himself)