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HSBC Holdings PLC’s endorsement of a proposed Chinese security law in Hong Kong has begun to widen fault lines over the British institution’s relationship to the city’s masters in Beijing.

The bank’s statement on the eve of the June 4 anniversary of the 1989 crackdown in Tiananmen Square of a looming security law heightened worries among both executives and the rank-and-file over staff conflict, as well as potential blowback on the streets of Hong Kong.

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