I used to declare PSG the best team, but they were defeated by Chelsea, who had a poor performance in the Premier League previous season and won the Club World Cup easily against PSG. Since then, I've lost hope for PSG. Yeah, everything is a gradual process, but Xabi Alonso most have to working on Real Madrid's performances to ensure that they improve a little before the season begins so that they can be more consistent in the new season.
Defeated by Chelsea in FIFA club world cup doesn't mean to remove the status of PSG as one of the best team in the world. PSG is still one of the best teams, it remains one of the biggest candidate of the UCL champion in the next season.
Regarding Chelsea poor performance in the previous season, it can't be your reason to determine their performance nowadays. During the break of the season, Chelsea has improved many things. It includes signing some new good players. So, when they played against PSG in the FIFA club world cup final, it was no longer the same Chelsea squad in the previous season.Yep, Xabi probably needs a lot of time to improve Real Madrid performance. I see there are still many problems in Real Madrid team during the FIFA club world cup competition. They still couldn't get a suitable tactic, Xabi also too often changed the main players. Xabi also seems ignoring the ability of certain players such as Rodrygo, Camavinga, and Ceballos. If there is no positive change, I am not sure Real Madrid can be a candidate of UCL champion anymore.