In Hong Kong, tens of thousands of civil servants have taken to the streets to protest pay cuts. More than a hundred unions are taking part, saying the government has failed to adequately negotiate the terms. But the government says civil servant pay is far higher than comparable jobs in the private sector.

Traditionally well paid, and compensated with benefits such as housing allowances, Hong Kong's civil servants demonstrated on Sunday against proposed legislation that would allow the executive branch to cut their pay by up to 4.5 percent.

Hong Kong's leaders say the cuts are needed to curb the ballooning budget deficit. The government hopes, by reducing civil service pay, it can trim nearly $400 million off the shortfall.

The former British colony inherited a fairly large, albeit clean, bureaucracy that eats up more than 80 percent of government operating expenses.

The new minister for the civil service, Joseph Wong, urged government workers to remain calm. He promised more communication, but not negotiations with the unions.

Civil servant unions say it is not the cuts they are angry about but the way in which a law is being introduced to push through the cuts.

Marching with the crowd, Leung Chow Ting, head of the civil servant federation, said this labor dispute should not be resolved in Hong Kong's legislature, it should go through appropriate negotiations. The legislation is up for debate this week. If passed, it could open the door for further pay cuts.

Some critics argue Hong Kong's leaders have been secretive in the way they compared civil service salaries to the private sector, suggesting the numbers may have been manipulated to justify the cuts.

Until now, Hong Kong's well-paid civil service has been immune from feeling the pain of Hong Kong's economic recession. Whereas the private sector here has been experiencing layoffs, pay freezes and salary cuts.