I'm not the right person to answer this, I think it requires a Naselus understanding of the economy mechanics. I'm not actually sure that Local and Sphere are separate markets, leaving your factories to compete directly with Chinese Artisans. China has such a massive economy they can keep taxes low, so it's easier for Artisans to make whatever while your factories are not as efficient. I'm not actually sure they keep taxes low, but as an unciv they have low tax efficiency. Later game though you should have no trouble with your factories being massively profitable.
Out of curiosity are you playing HoD? I didn't think sphering China was possible anymore.