2016 will make or break Xi Jinping's term as paramount leader

Reports that Xi Jinping is now being referred to as the "core" leader of China appear to coincide with the middle kingdom's latest financial troubles, and could be an indication that we have reached a make-or-break juncture in Mr. Xi's expected decade-long term as paramount leader.

On the one hand, it will be reassuring to those that welcome China's rise to hear that Xi is increasingly frustrated with bureaucratic inertia within the communist party ranks - they've been saying all along that this is the main obstacle to much-needed economic reform and restructuring, and that Xi's own personal determination to transition the Chinese economy from investment and trade towards services and domestic consumption has never been in much doubt.

On the other hand, it is downright scary to those fearful of China's autocratic retrenchment that so much now depends not merely on the ruling party, but on just one man's authority over that party - these liberals are left to wonder how on earth China will finally get on the path to Western-style democratization someday, assuming that it's even still desirable for Beijing if it manages to become an even wealthier and stronger dictatorship than it already is.

Because China has essentially run out of time to start fixing its deep underlying socioeconomic imbalances, 2016 will almost certainly go down as the year in which Xi Jinping's ambitious scheme for taking modernization to the next stage either finally lifted off or sputtered out unceremoniously on the runway.

One can easily sense Xi's growing impatience with the vested interests within the party - the local officials and state enterprise bosses he hasn't yet brought to heel - now that the entire world is fixated on the possibility of a hard landing of the Chinese economy in the form of a massive, unintended and uncontrolled devaluation of the yuan. He knows that no matter what the facts on the ground, that such a disaster will be squarely blamed on him and him alone.

Ironically, it is world opinion that ultimately has Xi's back in his struggle to whip his party into line: we may not like him, but we're woefully unprepared to deal with the consequences of his failure to do so. At a time of upheaval in the Middle East and stagnation in Europe and America that have fueled both the extreme right and the extreme left to a fever pitch unseen in four decades, a Chinese collapse is likely to truly unleash the worldwide floodgates of bigotry and xenophobia in the form of trade and currency wars emanating outward from Asia, and possibly even reverse the seemingly unstoppable march of globalization since the end of the Cold War.

Yet that's why, in the final analysis, Mr. Xi has a pretty good shot - to bet against him is to bet against the status quo of not just China, but the entire edifice of the post-Bretton Woods global financial and economic system dominated by central banks, their subsidiary large international financial institutions, and the massive transnational corporations.

That's a much more formidable lineup than a communist dictatorship, even China's.