A pillar of prosperity and modernity, Taipei is the capital and largest city in the island republic of Taiwan. This sophisticated hub of global business was a provincial backwater until an inflow of direct foreign investment from the 1970s onward transformed Taipei into a center of high technology, manufacturing and design. By the late 1980s the city — located near the northern tip of Taiwan, 120 miles from mainland China — was modernizing in a hurry, replacing gray industrial zones with glittering high-rise corporate aeries, shopping malls and business parks. It was a dramatic change for a place that had drifted along for years as a drowsy administrative center surrounded by farms.

Taiwan was ruled with an iron fist by the Kuomintang, the nationalist party led by Chiang Kai-shek, who retreated to the island with his army after the 1949 Communist Revolution, making Taipei his capital. Taipei still bears the imprint of Chiang, who died in 1975. Today’s Taiwan Taoyuan International Airport (TPE) bore his name until 2006. A massive statue of the generalissimo, guarded by stone-faced soldiers, looms in the central city near the massive Chiang Kai-shek Memorial Hall. The plaza in front of the memorial is a frequent scene of political rallies, a fixture in Taipei since the island became a vibrant, raucous democracy in the 1990s. Taiwan’s current president, Ma Ying Jeou, was elected in 2008; he has promoted closer economic ties with mainland China, helping to cushion the effects of worldwide recession which has slowed Taiwan’s growth.

The People’s Republic of China entered talks early this year with Taiwan to forge the Economic Cooperation Framework Agreement. Taiwan is weighing whether to allow Chinese banks to buy 5 percent stakes in Taiwan banks. China has loosened restrictions on mainland tourists traveling to Taiwan, and the two now allow a few direct commercial airline flights; formerly, travelers had to change planes in Hong Kong. The United States is the island’s third-largest trading partner, and export-minded Taiwan is America’s 11th-largest. American business knows Taiwan as a maker of high-technology equipment. Taiwan Semiconductor Manufacturing Co., Shihlin Electric and Engineering Corp. and HTC Corp., which makes smartphones, are among Taiwan’s leading brands. Many U.S. high-tech firms — such as chipmaker Broadcom, which operates a design center in Taipei — have a footprint in Taiwan.

In addition to being a bustling business center, Taipei is a lively leisure destination. The city is animated by 24-hour nightlife and first-rate restaurants, funky street markets and glossy shopping malls, superb museums and classical art from every era of Chinese history.

One of the must-sees after the meetings are over is the National Palace Museum, a sprawling hillside complex on the outskirts of town that houses treasures of Chinese art and history — many carried off to Taipei by Chiang from Beijing’s Forbidden City. The museum, which finished a multimillion-dollar renovation in 2007, showcases magnificent holdings of jade, exquisite ivory carvings as delicate as lace, artful bronzes, landscape paintings, vintage coins and early pictographs that evolved into the characters used in Chinese writing. Not far from the museum is The Grand Hotel, a big, curved-roofed Taipei landmark, where Taiwan-born filmmaker Ang Lee — who won a best director Oscar for Brokeback Mountain — filmed scenes for his moving Chinese family drama, Eat Drink Man Woman.

A safe, efficient city of 2.6 million people (7 million in the metropolitan area), Taipei is the gateway to Taiwan, a de facto nation of 23 million Mandarin Chinese speakers. Taipei boasts modern highways, subways, passenger trains and, in the latest wrinkle, high-speed bullet trains. Taiwan High-Speed Rail, opened in 2007, runs trains at top speeds of 186 mph down the west coast from Taipei in the north to Kaohsiung, a city of 1.5 million and the island’s second-largest city, in the south. With seven stops, the journey, popular with executives doing one-day business trips, takes two hours; a one-stop express takes 90 minutes. Smooth, fast and quiet, the high-speed trains cost approximately $50–75 for a round-trip business-class ticket.

Taipei replicates much of Taiwan in miniature, even the island’s volcanic hot springs and mountains. The city boasts craggy, hilly Yangmingshan National Park, ideal for hiking, at its northern extremity. The northernmost urbanized district, Beitou, is festooned with hotels that pipe in sulfurous hot water from the mountains. Villa 32, a luxury spa hotel in Beitou, includes Japanese-style lodging complete with blond tatami floor mats and sliding wooden doors. The Japanese accents aren’t accidental; Japan colonized Formosa, as Taiwan was then called, from 1895 to 1945.

The city is laid out on a grid pattern. Broadly speaking, the west side is the older part of town, home to historic neighborhoods and antiquities, though it also has the massive, modern Taipei Main Station, the city’s rail center. The east side is the up-to-the-minute section.

Like most modern cities, Taipei is a work in progress. Projects under construction include a new Taipei Performing Arts Center and Taipei Center for Popular Music, both set to be finished in 2014. The city’s Mass Rapid Transit system, the MRT, opened in 1996, is building an extensive new line scheduled to start service in September; and a rail link to the international airport is expected to open in 2013. In the meantime, beware of construction hazards including torn-up streets. Combined with Taipei’s humid, subtropical climate, that makes walking all but short distances uncomfortable. It is possible to escape the bulldozers, however, in the city’s caught-in-amber older sections.

Chinese comfort food is on offer in vintage districts such as Wanhua, a riverside quarter of modest homes, temples, winding lanes and street markets. Actually, a wide array of Chinese regional specialties is available, at a range of prices, all over town, thanks to the 2 million refugees from mainland China who accompanied Chiang to Taiwan in 1949.

Wanhua is home to locally famous restaurants such as Din Tai Fung, a narrow, multistory dumpling joint. Despite the clamor and the perpetual queue outside its steamy, street-level kitchen, Din Tai Fung is efficiently run by a young, headset-wearing staff. A typical lunch includes a starter of wonderfully savory chicken soup followed by succulent, intensely juicy steamed chicken and pork morsels served in straw baskets and washed down with oolong tea grown in Taiwan at elevations of up to 10,000 feet. Din Tai Fung has opened branches outside Taipei — including an outpost in Los Angeles — but the restaurant on Wanhua’s Xinyi Road is very much the flagship.

The symbol of Taipei since it opened on New Year’s Day 2004 is Taipei 101, a gleaming, 101-floor, 1,670-foot-high behemoth with eight vertical sections that pierces the sky like a stalk of metallic bamboo. Built in the newer eastside section, it was the world’s tallest building for six years until Dubai’s Burj Khalifa topped it in January. At the base of the building — 38 seconds from the 89th-floor observation level on ultra-fast elevators — is a five-floor mall with upscale international shops such as Mitsukoshi and L’Oreal.

The Shangri-La Far Eastern Plaza Hotel, on handsomely landscaped Tun Hwa South Road, epitomizes the contemporary scene. With five fine-dining restaurants, a soothing spa and picture-frame views of Taipei 101, the Shangri-La is favored by international business travelers. Isuki, the hotel’s smart Japanese restaurant, is one of the city’s best for Japanese food. Taiwan has a complicated relationship with Japan, which left a cultural imprint that includes a love of Japanese cuisine and hot-springs culture. Older Taiwanese can often speak Japanese, thanks to Japan’s 50-year presence.

Young people in Taipei favor their own, decidedly Chinese social whirl. At Party World, an 11-story establishment with a marbled lobby and gleaming chandelier, scene makers can rent rooms for karaoke and, well, partying. Young people haunt neon-lit city streets near Ximen Station on the MRT, taking photos and text messaging at all hours, the glow from handheld devices bathing their faces. The flagship of the Eslite bookstore chain in the stylish Core Pacific City Mall is open 24/7, graced with a good selection of English-language books on the fourth floor and a toothsome café on the 11th floor.

Info to Go

Express buses from Taiwan Taoyuan International Airport (TPE), 18 miles from downtown, run approximately $4–5; taxis average $31–37. The MRT is swift, clean, quiet and safe; English is included in signage and station announcements. Taxis are plentiful and metered; have your hotel write down your destination in Chinese for the driver. Don’t even think about renting a car; construction and heavy traffic, thick with darting motor scooters, make driving difficult. Visit www.go2taiwan.net.

Just the Facts

Time Zone: GMT +8
Phone Code: 886 Taiwan, 2 Taipei
Currency: Taiwan new dollar
Entry/Exit Requirements: U.S. citizens may visit for up to 30 days without a visa. Passports must be valid for six months beyond the period of stay.
Official Language: Mandarin Chinese. Taiwanese and Hakka dialects are also spoken.
Key Industries: Computers, computer monitors, semi-conductors, consumer electronics, shipbuilding

Diversions

For a quick taste of old Taipei, head straight for Wanhua, with its celebrated Longshan Temple and crowded night market with the notorious Snake Alley.

Taipei started in Wanhua centuries ago when the future metropolis was a dank, dirty river port filled with sailors, brothels and cheap places to eat and drink. The sailors left when the rivers silted up, and the brothels left when prostitution was outlawed. Wanhua still carries a wild-side taint, but today’s Wanhua is a legitimate district of small businesses, family homes and colorful street life. There are many echoes of old Taipei with its twisting alleyways, bartering merchants and flavorful eats.

The district’s most venerable site is Longshan Temple, founded in 1738 and still a place that locals visit to pray and seek blessings. With its columns adorned with dragon motifs, its big urns and incense burners and pagoda-style roof, it is the very picture of Chinese antiquity.

Close to the temple is Huaxi Street Tourist Night Market. Don’t be put off by the name; the market — the only street market in the city covered by a roof — is as thick with locals as tourists. All are in search of the same attractions: good keepsakes on sale and good street food, best enjoyed after dark — beef noodle soup, pearl milk tea studded with tapioca and local dishes prepared with snake blood and snake meat.

Yes, snake. Several shops specialize in serving snake dishes, some cherished in folk medicine. The city fathers don’t promote Snake Alley, with its blast-from-the-past funkiness. Indeed, it is not for the squeamish. In several shops, live, skinned snakes, ready for cooking, hang from hooks. Stern signs warn passersby not to take photos.

There is much more to the market — and Wanhua — than this, however. It is an often poor but safe place, colorful and flavorful. A meal taken at a small, streetside table with spoon and chopsticks while night-time shoppers stroll by may be your most memorable meal in Taipei.

Lodging

The Grand Hotel
This big 1950s-era city icon has ornate, traditional Chinese décor in an eye-catching hillside setting. 1 Chung Shan N. Road, Section 4, tel 886 2 2886 8888, $$

Shangri-La Far Eastern Plaza Hotel
Modern international hotel with soothing spa, five polished restaurants in a good central business location. 201 Tun Hwa S. Road, Section 2, tel 886 2 2378 8888, $$$

Villa 32
Splendid Japanese-influenced hot-springs inn with expansive garden and sumptuous suites. 32 Zhongshan Road, Beitou District, tel 886 2 6611 8888, $$$$

Dining

Din Tai Fung
Very popular restaurant in the oldest part of town, with an easy mix of locals and travelers, features succulent steamed dumplings. 194 Xinyi Road, Wanhua District, tel 886 2 2321 8928, $$

Isuki
Contemporary Japanese fare in stylish setting inside modern downtown business hotel. 201 Tun Hwa S. Road, Section 2, tel 886 2 2378 8888, $$$

Silks Palace
In the National Palace Museum, this gorgeous 5-story restaurant with a glass façade highlights traditional Chinese dishes such as boneless Yonyi goose. 221 Chishan Road, Section 2, Shilin District, tel 886 2 2882 9393, $$$

Checking in with Lin-Chuan Hsiao
Deputy Director of the Taiwan Tourism Bureau, San Francisco

What is hot in Taipei right now?

For the general public, the hottest topic definitely is the skyrocketing price of housing. For government and businessmen, it’s the ECFA agreement with China.

The “Korean Wave” is really everywhere. Youngsters, especially girls, are crazy about Korean pop music. The dances are copied and danced all over the island by everyone from kids to seniors. Korean cosmetics sell well in department stores. Some girls even fly to Korea for plastic surgery during summer vacation.

How has the global economic slowdown affected Taipei?

The only impression most Taiwanese got was unpaid leave. It happened last year — spread out from the semi-conductor industry — and is almost gone. Now, nothing negative can be observed.

What is the impact of the increasing number of mainland Chinese tourists visiting Taiwan?

They are expected to reach 1 million and become our No. 1 tourist source this year, surpassing Japan. Last year, Chinese tourists contributed NT 9.8 billion to Taiwan’s economy; this year, the number is expected to reach 12.3 billion. They crowd the National Palace Museum, clean (out) the souvenir stores, dominate Taipei 101 and occupy the Chiang Kai-shek Memorial Hall — not to mention the hotel lobbies around the city.