Chinese leaders may have thought they were off the hook last fall when they finally owned up to their HIV epidemic, but their reality check had only just begun: A new UN report insists that the world's most populous nation is facing "titanic peril." Released in June at a Beijing press conference, the chiding report places China "on the verge of a catastrophe that could result in unimaginable suffering, economic loss and social devastation," and predicts that if prevention efforts aren't expanded, 10 million Chinese will have HIV by 2010, a staggering increase from the current 850,000 to 1.5 million estimated infections.

But the key culprit is less the virus than a regime whose anti-HIV agenda is to cover up the crisis. Awareness is abysmal, with many Chinese believing that they can contract the virus through shaking hands but few grasping the fact that clean needles and condoms are necessary to prevent it. In big cities the epidemic is spreading through the usual routes -- sex and IV-drug use -- but it has also run rampant in rural regions, where peasants regularly sold their blood and received tainted transfusions after the plasma was removed.

The Ministry of Health angrily rejected the UN assessment, pointing to a new five-year $12 million prevention plan (less than half of New York City's prevention budget for one year). "We are doing more than they say," said a health-ministry rep. "It's just another effort by the West to embarrass China."