News Analysis Financial problems at a Chinese state-owned financial firm could make foreign investors reevaluate their risk tolerance for Chinese corporate bonds. One of China’s four massive asset management companies created around the turn of the century, China Huarong Asset Management Co., has been rumored to be on the verge of insolvency. As one of China’s critical “bad banks” set up to buy toxic loans from the balance sheets of the country’s commercial banks, how Huarong’s ongoing issues are resolved—or not—by Beijing will have key implications for the Chinese financial markets. Huarong, which owes more than $42 billion in bonds outstanding, spooked investors after it did not release its 2020 earnings and financial statements on time. The company also temporarily suspended trading of its shares on April 1. The asset management giant was already buckling under negative headlines. Its former chairman, Lai Xiaomin, was executed earlier this year after he …