Once Proud, Now Angry.

Hong Kong's civil service has long been the envy of Asia. Surveys regularly cite the competence and probity of the enclave's government workers as a top reason Hong Kong is a good place to do business. The Asian Intelligence Report, published by the Political and Economic Risk Consultancy, recently ranked Hong Kong the least bureaucratic among 14 economies--including those of the United States, Australia and Japan. For their efforts, Hong Kong's 171,000 bureaucrats are well paid; the financial secretary makes about $2 million a year, and entry-level salaries are 18 times higher than those on the mainland.

So why are Hong Kong's bureaucrats so unhappy these days? In recent months several high-ranking civil servants have quietly jumped into the private sector--a move that government workers rarely entertained in the past--and executive recruiters say many others would be happy to join them. According to the Hong Kong Transition Project, an ongoing research effort, civil-service morale has reached a historical low. At a time when Hong Kong is facing a gloomy economic future and a crisis of identity, one of its fundamental pillars may be cracking.

In some ways the civil servants are simply coming under the same pressures as the rest of the population. Hong Kong is facing a major deficit (about $9 billion this fiscal year), and Chief Executive Tung Chee-hwa aims to solve it partly by chopping the heads and salaries of the people who ...