It's so easy isn't it - to pigeonhole one place in relation to another? Yet it is the habit of travellers. We seem always to want to explain a country in the terms of somewhere else.

So it is, in the middle of Taipei, capital of Taiwan (formerly Formosa) I find myself saying, 'Hmmm'..this is just like China - without the bicycles'. And it is. Except here, at the traffic lights, there's a brimming tide of motor scooters, bearing sometimes a whole family, and noisily gunning off the instant the lights change. In China, the intersection would be dense with hundreds of bikes, wobbling as they waited their turn.

In fact the whole city, it seems spins a kaleidoscope of half-memories, quasi-comparisons in my mind. This corner - is it like Bangkok? Or maybe Kuala Lumpur? Those sleek office buildings - surely I saw the same in Singapore. And those interminable silent armies of apartment blocks, each capped with a tiny pagoda style roof. That was Penang, right?

Of course as you start to acclimatise to Taipei, its personality emerges. Talk to the people and you see the differences to their Chinese neighbours across the Taiwan Strait. The people are still proudly Chinese by race, but Taiwan is carefully named the Republic of China, not the PROC (People's Republic), as China is termed. Yet it is the people that have made this country, building it in half a century from a country annexed by Japan to a self-sufficient one trading with the world.

Located north-east of Hong Kong, and almost 400 kilometres long straddling the Tropic of Cancer, to most westerners Taiwan appears dangerously vulnerable now that Hong Kong is finally a Chinese Territory. We imagine China's eyes focussed with avarice on this small and economically valuable country. Yet the locals laugh when we cautiously raise the subject. Whether it is bravado or not, most simply say they believe China has too much to worry about - controlling its population, stretching its capitalistic muscles - to be too bothered about tiny Taiwan. You have to hope they are correct.

So Taiwan gets on with growing and producing. Here there are families with several children, pollution is being addressed, technology increases and the economy looks as healthy as the mop-headed kiddies in brilliant nylon parkas that bring colour to even the greyest scenes.

I was grateful for these especially when I visited hot springs in the hills north of Taipei. Here the cement-coloured mud, plopping sullenly, was matched only by the clouds that almost touched us. Steam seeped from crevices and a sulphurous stench stuck to us all.

Enter a busload of eager schoolchildren, brilliant in their cool-weather gear, who swarmed over the telescopes and safety fences, measured the ground temperature and gaped in amazement at the moonscape around us, brightening my pictures as they did so.

That small event seemed to make sense of this country to me. Sure there is pollution, but many countries are more affected. There are earthquakes - a major one devastated parts to the south of Taipei last September, and there were even two minor ones in the few days I was in the country - but buildings have been constructed using the latest technology to withstand tremors. Prices are high - or is that simply a reflection on the Aussie dollar which fares badly in so many places worldwide? Despite this, Taiwan still manages a brightness, a youthfulness, that exudes hope and optimism.

This massive city and its suburbs accounts for around half the country's 20 million population, and has much to offer. The Lungshan Temple is more like a bustling community market. Fruit and foods are laid out on tables, and girls chattering on mobile phones and juggling designer shopping bags, dash in to grab a handful of joss sticks and offer a quick prayer towards the Goddess of Mercy, benignly surveying the crowds from her vantage point.

Visitors to Taipei can view priceless Chinese antiques too, rescued from the mainland before the Cultural Revolution could shatter them. Intricately carved jade screens, porcelain tea sets that have survived in Emperor's palaces since the fourteenth century, delicate scroll paintings - these are all now safely housed in the National Palace Museum in Taipei.

Taiwan's own history dates back to 1206 when it became a protectorate of the Chinese Empire. Subsequently invaded by the Dutch in 1624, then the Spanish, and later by mainland forces in 1661, the French also occupied the north of this island briefly from 1884. From 1895 Japan held sway until after the war in 1945 when Taiwan was restored to the Chinese. Within this period, in 1912, the Republic of China was born following the Wuchang Revolution.

Twenty-first century Taipei is sensibly not selling itself as a dream destination, a resort-style escape. The tourism spin-doctors know it has other assets. The large five-star hotels here are ideal for massive conferences and exhibitions. Bill Gates was in town to attend a World Technology Conference when I was there, and our hotel was swarming with medicos, booked into another seminar. As a business venue it is ideally placed. Well-equipped technologically, and close enough to Hong Kong or Tokyo for a stopover en route, there is still enough to occupy spouse-partners for several days during a conference, and with interesting side trips for all, once the work is done.

Taroko Gorge, a marble gash in the landscape in the Taroko National Park, is well worth the hour's flight from Taipei. Here buses rumble along the scenic road from Hualien slipping into tunnels with viewing holes cut at intervals, then emerging into sunlight, with the Liwu River still creeping through the base of the gorge beside them.

Further south the coastal drive skirts the Pacific shoreline, or travellers can cross the island through forested mountains using the 277 kilometre Central Cross Island Road that was slowly and painfully created in the 1950s.

Hundred of years ago Portuguese mariners called this place Formosa, or beautiful island. We may call it Taiwan today, but visitors will still agree that those early sailors named it well.