Thirty-eight million people around the world are now living with HIV, the UNAids agency reports.
China has seen an increase in HIV cases
Five million new cases were diagnosed last year alone - the largest number in any one year since the epidemic began.
The UNAids report says efforts need to be focussed in Asia, which it warns needs to act now to prevent "a full blown Aids catastrophe".
But it warns sub-Saharan Africa and Eastern Europe continue to be badly hit by HIV epidemics.
Around 1.1 million people were diagnosed with HIV in Asia last year alone - more than any previous year.
Significant increases in HIV infections were seen in China, Indonesia and Vietnam.
UNAids warns that, as the area is home to 60% of the world's population, the growing epidemic has "global implications".
But the agency praised Thailand, which has managed to cut the number infected with HIV by encouraging men to use condoms more and reduce their use of brothels.
The number of new infections in the country fell from a peak of 140,000 in 1991 to 21,000 in 2003.
The report warns: "If other Asian countries fail to target populations at high risk, the epidemic will affect much greater numbers of people in the general population."
UNAids said concerns are growing over the increasing number of HIV cases being seen in India. It is now home to one in seven HIV positive people worldwide.
In sub-Saharan Africa, UNAids warns that the stabilisation in HIV rates is actually due to a rise in deaths from Aids. It says there is still a continued increase in new infections.
Last year, three million people died from Aids across the world.
UNAids is calling for the global funding allocated to the fight against HIV/Aids to grow from US$5 billion in 2003 to US$20 billion by 2007.
The report says women and young people are disproportionately affected by HIV/Aids. There are now 13 women infected for every 10 men.
Women now make up 50% of those living with HIV across the world.
UNAids also warns the HIV epidemic is continuing to grow in Eastern Europe and Central Asia, where 1.3m people are living with HIV. Russia, which has over 3m injecting drug users, is one of the worst affected countries.
But HIV infections are also on the increase in the US and Western Europe.
UNAids says new infections are increasing, particularly among men who have sex with men.
The number of people in the UK living with HIV rose from 24,000 at the end of 2001 to 32,000 at the end of 2003.
The report warns: "The reasons probably include 'prevention fatigue' and complacency rising from the availability and promise of anti-retroviral treatment."
UNAids experts warned both prevention and treatment remained equally crucial in the global fight against HIV/Aids.
It said just one in five people had access to HIV prevention services and just 7% of people in developing countries have access to antiretroviral drugs.
Dr Peter Piot, UNAids Executive Director, said: "Despite increased funding, political commitment and progress in expanding access to HIV treatment over the past two years, the Aids epidemic continues to outpace the global response. "
He added: "There is no time to misread the signals, with Asia facing life and death choices in preventing a full-blown Aids catastrophe in the region."
"Equally alarming, infections in Africa continue to increase and people are dying in large numbers."
On Tuesday, International Development Secretary Hilary Benn announced the UK government was providing £116m over the next four years to tackle the global Aids pandemic.
He said £36m would go to UNAids, and a further £80m to the United Nations Population Fund.
Nick Partridge, Chief Executive of Terrence Higgins Trust said: "The global response to HIV is not keeping pace with the epidemic.
"More is being done to combat this devastating virus than ever before, but it's still not enough. We've got to put everything we have behind efforts to tackle this epidemic, or the numbers of people newly infected will continue to rise year after year."
A spokesman for the World Aids Campaign added: "Many countries highlighted in this report could avert major epidemics if they adopt the prevention, education and access to care and treatment packages that have been effective elsewhere in the world.
"But they also need to know that the world is behind them with the money and the will to help them take charge and turn back the death and destruction that HIV and AIDS is having on their communities."
The global estimates in this latest report are lower than in previous years.
However, UNAids says this is because better surveillance data from individual countries and improved methods of estimating HIV rates have led to a revision of 2001 figures, rather than because the number of people living with HIV has fallen.