BEIJING - The United Nations said yesterday that AIDS in China is pushing the country to "the verge of a catastrophe that could result in unimaginable human suffering, economic loss and social devastation."

The U.N. report "HIV/AIDS: China's Titanic Peril" is the direst warning to date about the threat the epidemic poses to the world's most populous nation. It suggests that China's stability could be at risk if the government fails to urgently combat the rising AIDS crisis.

"All indications point to the brink of explosive HIV/AIDS epidemics in increasing numbers of areas and populations, with an imminent risk to the widespread dissemination of HIV to the general population," the report said.

While alarming, the report did not intend to imply that China was doomed, said Kerstin Leitner, the U.N. resident coordinator in China.

"Let's focus attention on how to turn the ship around to avoid the iceberg," she said at a news conference after a Chinese health official asked if the agency thought China was about to "sink into the sea."

The 89-page report suggests that a turnaround in China's response to HIV/AIDS will not be easy.

It said China's government has made "significant progress" over recent years in updating national policies, laws and regulations pertaining to HIV/AIDS. But many factors still hinder an effective AIDS response, it added, including "insufficient openness when dealing with the epidemic, insufficient resources both human and financial, scarcity of effective policies, lack of an enabling policy environment, and poor governance."

According to the report, the factors help explain why the Chinese government's own estimate of the number of Chinese infected with HIV, the virus that causes AIDS, shot up from 10,000 in 1995 to 850,000 in April.

The actual number may be much higher, experts say, because the government's monitoring of the epidemic has been spotty.

Siri Tellier, head of the U.N. group that compiled the report, said the number of HIV infections in China could rise to 10 million by 2010 if the government does not do more.

So far, most HIV infections in China have been linked to intravenous drug use and the commercial sale of blood. But sexual transmission of the virus is increasing rapidly among homosexuals and heterosexuals, a trend that experts fear will accelerate the epidemic.

"It's on the verge of spreading to the general population," Tellier said.

Since signing the Paris Declaration at the International AIDS Summit in 1994, China's government has taken steps to combat the epidemic, but most have been small ones.

China held its first national HIV/AIDS conference in November.

According to official news media quoting Chinese Ministry of Health sources, only $12 million has been spent annually over the past five years to combat the epidemic.