Well, is it true that sphering China kills your industry ? I am not sure, but I tried starting as France. In 1836, France has a thriving paper industry, and after 20 days it is still in the green.
France NOT sphering China
If I start as China, after 20 days the paper artisans are also making a profit.
France sphering China
If I start as France, and then modify the save file to sphere Chinese countries, after 20 days my paper factory is in the red.
But the Chinese paper artisans are even worse off .
So if France spheres China, it may kill both France's factories and Chinese artisans. France and China both get a share of the common market. The effect on China is worse than on France, but also France's factories would be better off without having to compete with Chinese artisans.
But I have no idea what the formulas are, they may not even be deterministic.