Three corporate giants are posing a stiff test for Chinese banks

NOT LONG ago the conventional wisdom was that China would do whatever it took to save its biggest companies from failing. Times have changed. Three corporate giants—Evergrande, the country’s biggest property developer; Huarong, its biggest investor in bad bank assets; and Suning, a retail giant—are all suffering from financial distress.The three firms’ long rush to expand has collided with slower growth, tighter credit and stricter regulatory scrutiny. Their bonds are trading at discounts of roughly 25% to face value, showing that investors have priced in a significant chance that they will default.