First, your engine was made on 23 August 1995, which is long before the Chongqing plant opened - and initially it made only horizontal shaft engines anyway.

Here is your Illustrated Parts List:
http://bsintek.basco.com/BriggsDocumentDisplay/18hruJXHnfBhU7y.pdf

The inlet tappet clearance is clearly inadequate, and the valve may not even close fully after warmup. The exhaust is also below specification. I suggest you should remove the valves, lap them into the seats, and grind the ends of the stems slightly to increase the tappet clearance, but just to the required levels, no more. Be careful: the ends of the stems must be accurately kept square to the axis of the stems.

Inspect the valve seat inserts, both for cracks and looseness. The iron inserts are just riveted by slightly upsetting the aluminium around them, and it is not especially unusual for them to come loose if the engine has been substantially or repeatedly overheated. If this happens it is fairly common practice to indent the aluminium around the outside of the seat slightly, usually with a center punch, to deform the aluminium to bring it into contact with the outside of the seat. However don't do this unless the seat is loose: Briggs does not approve of doing it at all. If it has to be done, let's talk about it more before you actually do it. There is a much better way than by using a center punch. Also, it is important to end up with the seat square to the valve stem, and this probably won't happen if you just rivet it with a punch.