Why Germany’s diplomatic gamble on China could reshape Europe’s future

[EUROPE] In an era when European leaders often stick to scripted condemnations and cautious alliances, Germany’s new Chancellor Friedrich Merz has thrown out the old diplomatic playbook. His recent call to China’s President Xi Jinping, urging Beijing to help end Russia’s war on Ukraine, signals a strategic pivot that cuts through moral posturing and zeroes in on pragmatic power. Merz is not simply chasing peace; he is recalibrating Germany’s place in a world reshaped by hard-power contests, shifting trade alliances, and the erosion of U.S. global leadership. This moment marks a test of whether Germany can turn economic interdependence into diplomatic leverage.

Germany’s Security Interests Are Global Now

For decades, Germany’s foreign policy was defined by European integration, NATO alignment, and postwar restraint. But Russia’s invasion of Ukraine has shattered the illusion that geography protects. Merz’s framing of the Ukraine war as a matter of German national security, not just European solidarity, marks a deeper shift: Germany now recognizes that its security is tied to the global order, not just regional stability.

Data point: Germany’s military budget, once stubbornly capped, surged past €64 billion (US$72 billion) in 2024—a 22% increase from pre-Ukraine levels. Merz understands that military deterrence alone won’t deliver security. Instead, he’s betting that global diplomatic coalitions, even unlikely ones, are key to constraining aggression. His outreach to Xi acknowledges an uncomfortable truth: China, like it or not, holds real sway over Moscow.

China as a Power Broker, Not Just a Rival

Many in the West still frame China solely as a rival or threat. Merz’s approach suggests something more nuanced: recognizing China as both competitor and indispensable power broker. Chinese-German trade, at €246 billion last year, underpins entire sectors of the German economy—from automotives to industrial machinery. But Merz’s call wasn’t just economic appeasement; it was a calculated appeal to Beijing’s self-interest.

Market trends show China increasingly positioning itself as a “stability broker” in the Global South, mediating conflicts in Africa and the Middle East. If China wants to cement its global statesmanship, contributing to a Ukraine ceasefire offers a stage with maximum geopolitical impact. Merz’s gamble is that appealing to Xi’s ambition, not moral obligation, will get results.

A Foreshadowing of Post-American Europe

Perhaps the most striking element of Merz’s move is what it says about Europe’s evolving posture. With U.S. elections looming and transatlantic policy increasingly unpredictable, Germany is not waiting passively for Washington to lead. Instead, it’s testing what independent European diplomacy could look like—one that pragmatically engages China and seeks to shape outcomes, rather than just react to superpower rivalries.

Forecast: If Merz’s outreach produces even symbolic Chinese pressure on Moscow, expect other EU capitals to follow suit. This would mark a notable departure from the reflexive alignment of recent years and signal the rise of a more multipolar, transaction-driven European diplomacy. Crucially, it’s a sign that Berlin intends to shape, not merely survive, the global shifts underway.

What We Think

Germany’s diplomatic overture to China is not a soft play—it’s a hard-nosed recognition that moral clarity alone won’t end wars. Merz is signaling a willingness to engage adversaries and rivals alike, using Germany’s economic weight and political credibility to test new avenues of influence. This is both a gamble and a glimpse into Europe’s possible post-American future: a continent learning to wield its own levers of power, even in the shadows of superpowers. If successful, Merz’s approach could redefine what European leadership looks like in an era of fractured alliances and transactional geopolitics. For now, all eyes should be on whether Berlin’s boldness delivers more than just headlines.