Does anyone know the exact mechanics for how reparations work?

Has anyone ever laid out exactly how the war reparations mechanic works?

I recently played a campaign as Austria-Hungary and, after seeing someone mention how effective war reparations could be, decided to play the campaign aggressively and focus on getting as many war reparations as possible. I pretty quickly passed Italy after winning 2-3 wars with them, and after a couple more with different powers, I was left with a mid-upper level domestic economy in the mid to late 1910.

However, I decided to see if I could do the same with China as a challenge, but even after winning a couple wars against Japan, the economic balance hadn't really changed like it had with AH and Italy.

As a result, I have some questions if anyone happens to know for certain:

1. When receiving war reparations, is the amount transferred between economies based on the size of your economy, theirs, or something else entirely?

2. Does having allies decrease the amount transferred by reparations?

3. If you spend some of the peace treaty points on colonies, do the rest of the points count towards reparations, or do you need to pass on taking colonies altogether to get the effect?

4. Finally, are reparations directly proportional to the number of points you have? So, would a 8 point peace treaty get you twice as much as a 4 point peace treaty?

Thanks