By Jason Subler

DALIAN, China, Sept 9 (Reuters) - China needs to speed up efforts to combat the spread of HIV/AIDS by giving freer rein to civil society organisations and enrolling the help of companies, a U.N. official said.

Peter Piot, head of the United Nations AIDS agency UNAIDS, gave Beijing high marks for opening up official policy towards AIDS, once stigmatised as a disease of the West.

But a gap between centrally-made rules and implementation by local authorities was impeding prevention efforts, threatening China with an even bigger human and financial toll, Piot said in an interview.

"It's act now, or pay later," Piot said. "Given the fantastic economic development and the social transformation that is going on ..., delaying or being slow in terms of implementing the policies will result in the spread of HIV."

Side-effects of economic growth, including swelling populations, have helped feed high-risk activities like the sex trade and presented authorities with new challenges, Piot said.

Armies of men have moved from their villages to the cities to help build roads, office blocks and factories that serve as the backbone of the world's fastest-growing major economy.

That economic engine is also being greased by roving businessmen, who are widely known to be another major client source for sex workers.

SEXUAL ENTREPRENEURS

"This whole, let's say, sexual entrepreneurship is a side-effect of rapid economic growth and new wealth," Piot said. "(It's about) mobile men with money or without money."

Piot, attending a meeting of the World Economic Forum, said it was especially important that authorities gave more freedom to civil society organisations more quickly, as they are best placed to reach out to marginalised groups.

"I don't know of any society that has dealt successfully with AIDS where civil society groups ... do not have the space to do their work," he said. "It's hard for government to do. Just think of gay men, or men who have sex with men -- how could the government do that, organise that?"

China keeps a tight grip on non-governmental organisations.

Rights groups say local officials, particularly in Henan province, have banned some activists from holding meetings and shut down other groups.

Henan was one of China's first areas hit by AIDS, with many people contracting the virus through contaminated blood in the 1990s. An estimated 650,000 people are now living with HIV/AIDS in China.

Piot said China needed to start letting activists speak out. "A voice from those who have no voice is very important," he said.

While he sensed readiness among central officials to allow AIDS activists to speak out more freely, Piot said many local officials were worried that greater openess about AIDS could hurt the local economy.

"I say: 'That's exactly the opposite. If people have a suspicion that you're covering up, not dealing with that, ... that decreases the confidence of investors,'" Piot said.

Piot hoped companies could get more involved in prevention efforts -- especially those employing migrant workers on building sites, at home or abroad.

Piot urged Chinese firms to overcome a reluctance to be associated with HIV/AIDS and set up education and prevention programmes for workers and populations they are in contact with.

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