In this Strategy Essay, Sebastian Heilmann argues, that governments across the globe have to adjust their China policies. Beijing's forceful geostrategic initiatives challenge traditional Western dominance in many world regions and international institutions. European China policy continues to be marked by severe deficits in coordination and decisiveness at both the EU-level and among EU member states. In order to avoid across-the-board stagnation of European China policy, Germany must act as a catalyst and take the initiative on substantive issues. German diplomacy and business have worked to consolidate many specific areas of activity, or niches, for productive cooperation with China. Germany’s China policy sets its sights on select areas one by one, rather than submitting all policy fields to one set of grand strategy. This niche diplomacy concentrates resources on the most promising fields of interaction. It provides policy-makers with a versatile framework to manoeuver through the shifting conditions for China policy.