USE_EARLIER means re-use the styles in the first document.
In this case, you are re-using the Normal style.
In the Chinese document only, your Normal style has: <w:spacing w:line="360" w:lineRule="atLeast"/>
So when that document is first, that line spacing is also applied to paragraphs in the English document which use Normal style.
So the results are as expected.
In summary, if you want to use USE_EARLIER without distortion, you need to ensure that any styles defined in an earlier document but used in a later one have the same definition. If this isn't true, you should be using RENAME_RETAIN!
Note, your documents also use different rPrDefault values;
English:
Using xml Syntax Highlighting
<w:rPrDefault>
<w:rPr>
<w:rFonts w:asciiTheme="minorHAnsi" w:hAnsiTheme="minorHAnsi" w:eastAsiaTheme="minorEastAsia" w:cstheme="minorBidi"/>
<w:kern w:val="2"/>
<w:sz w:val="24"/>
<w:szCs w:val="22"/>
<w:lang w:val="en-US" w:eastAsia="zh-TW" w:bidi="ar-SA"/>
</w:rPr>
</w:rPrDefault>
Parsed in 0.001 seconds, using
GeSHi 1.0.8.4
Chinese:
Using xml Syntax Highlighting
<w:rPrDefault>
<w:rPr>
<w:rFonts w:ascii="Times New Roman" w:hAnsi="Times New Roman" w:eastAsia="新細明體" w:cs="Times New Roman"/>
<w:sz w:val="20"/>
<w:lang w:val="en-US" w:eastAsia="zh-TW" w:bidi="ar-SA"/>
</w:rPr>
</w:rPrDefault>
Parsed in 0.001 seconds, using
GeSHi 1.0.8.4
Note the different font size (12pt versus 10pt, the sz values are half points).
See "Document Defaults" in the User Manual for more about this, but basically, in the USE_EARLIER case, only the first set of values can be taken into account. Where these aren't overridden by style settings or ad hoc formatting, you'll see an effect in the output document.