Any China that doesn't reach from Iran to Indonesia is a China that is too small.
But enough about real life politics, on to game mechanics, heh.
Fall From Heaven II has a civ that has a limited number of super-cities proportional to world size that can work their third ring, and any additional cities they settle or conquer are only glorified forts used to claim resources and strategic locations that control only their first ring. These settlements neither grow nor do they produce any yields or commerces, but in turn they also cost no maintenance. A garrisoned unit can upgrade such a settlement into a proper city at any time if the civ isn't already at their limit, e.g because a super-city has been conquered and razed by an enemy. Perhaps this mechanic can be copied for the purposes of simulating trade outposts? If these settlements count as colonies for the purposes of UHVs and Colonialism's extra commerce in capital effect then there's plenty of incentive for Portugal and the like to spam them all over the place, and to only upgrade the really well located ones into proper cities.
It would be a big overhaul, but there are few potential features I like more than the idea of a colonial outpost, that cannot create units, has a minimal upkeep and only serves to take possession of certain resources. Historically, most colonies did not consist of more than a trading post and a garrison until the beginning of the 18th century (with the exception of the Spanish Empire?) or even later in Africa and Asia.
One could add a lot of interesting features, like a 'colonist' unit that can found colonial forts, restriciting the settlement of colonies to these kind of colonial forts, upgrading the colonial fort to a full city with the required tech +- 100 years after one can build caravels or restricting resources a colonial fort can gather too luxury resources to encourage upgrades to full cities in the industrial era to simulate the transition from the colonialist to the imperialist era (this would also greatly synergise with an overhaul to make strategic resources limited if that were to ever happen).
I know this is probably a dream scenario, but it is exciting to think about it!
I think we're onto the basic idea here. One thing DOC does really well is that the gameplay basically enables roleplaying in a sense. What I mean is, often as a civ I will do something because of a particular gameplay rationale that translates into the historical rationale of that civ. Eg in the China example, I conquer Shenyang to prevent further barbarian spawns. Historically, China pacified Manchuria to prevent Manchu raids into China. Ludonarrative harmony, to be wankish. When ludonarrative dissonance occurs the fun is broken. In the discussed example, this is as China when I want to conquer the Tarim Basin cities, but don't because it will hurt my science. IRL China never thought this, and probably benefitted from conquering the Tarim Basin due to increased connections to Persia and Europe. Another example is as Portugal: I'm not settling far-flung cities to bring in large sums of luxury resources to enrich the crown, but rather to complete the UHV.
So taking Imp. Knoedel's suggestions and Paco's suggestions here's mine:
"Colonial Garrison"
Building, requires currency
Costs a minimal amount of hammers to build
-75% maintenance
Does NOT reduce expansion stability
City can only work first ring of tiles around it
+25% corporation commerce
And additionally:
Silk Route can spread in Chinese cities
Trading Company is not civ limited (eg, any civ can get it if they fill the criteria of sub-saharan africa/carribean/southeast asia and a luxury resource)
This then changes the game rationale a bit. As China, I am thinking "if I conquer these Tarim Basin cities I can bring the fight to the barbarians, keep contact with Persia, and establish valuable trade routes", as Portugal I am thinking "if I settle these African/Asian cities I can establish new trade routes and get even richer"
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I would also consider:
Silk Route can spread to even European cities if they have open borders with a civ(s) who has a clear route from China to Europe, have held that territory for a certain amount of time and are at peace with the European civ.
* This means if Persia/Seljuks are stable and mega they can even spread the silk road into Europe. There might be some way we could give a role for Italy in this so that we can represent the Venetian trade monopoly over Eastern trade, though I'm just spitballing here.
Something like "Mediterranean Trade" corporation, to encourage the Phoenicians and Greeks to set up more colonies throughout Europe.
* These could persist after Roman conquest so that certain important trade cities like Massalia and Emporion remain relevant.