Taiwan's Urban Development and the Rural-Urban Divide

30-second overview: In 1950, only 24% of Taiwan's population lived in cities; by 2020, this reached 78%—among the world's fastest urbanization rates. The six special municipalities concentrate 70% of Taiwan's population and tax revenue in just 30% of the land. But what's the cost? Taipei housing prices pierce the sky, Yunlin townships lose 30% of their population over 30 years, and remote elementary schools have just 3 students per grade—this is the light and shadow contrast of Taiwan's urbanization.

In August 2023, Xialu Elementary School in Kouhu Township, Yunlin County held its final graduation ceremony. Only 11 sixth-graders remained in the entire school. Principal Chen Zili fought back tears: "The children have all gone to study in cities. The grandparents left behind watching empty classrooms have broken hearts."

At the same time, developers in Taichung's 7th Redevelopment District held luxury housing briefings. Presale apartments at NT$1.5 million per ping sold 80% over the weekend. Most buyers were tech professionals migrating south from Taipei or north from Hsinchu, attracted by Taichung's "high salary, low housing cost" advantage.

These two scenes perfectly illustrate Taiwan's 70-year urbanization paradox: prosperity coexists with decline, opportunity mingles with loss.

Rocket-Speed Urbanization: 70 Years of Numbers as Witnesses

From Agricultural Island to Urban Island

In 1950, Taiwan's total population was 7.55 million, with only 24% (about 1.81 million) living in cities. The "urban" standard was very low—populations over 50,000 qualified as urban, with only six cities across Taiwan: Taipei, Taichung, Tainan, Kaohsiung, Keelung, and Chiayi.

Seventy years later in 2020, Taiwan's population reached 23.57 million with an urbanization rate of 78% (about 18.39 million). This means 8 out of every 10 Taiwanese live in cities.

Urbanization Milestones:

• 1960s: Urbanization rate exceeded 30% (industrialization beginning)
• 1980s: Urbanization rate exceeded 60% (manufacturing peak period)
• 2000s: Urbanization rate exceeded 70% (service industry transformation)
• 2020s: Urbanization rate approaching 80% (financial-tech concentration)

How remarkable is this speed? South Korea took 40 years to go from 30% to 80%, European and American countries took 100-150 years, while Taiwan completed the transformation in 50 years—truly "rocket speed."

Six Municipalities' Absorption Effect: The 7-3-7 Rule

The 2010 county-city mergers forming six special municipalities unexpectedly accelerated population concentration:

• 70% Population: 16.34 million people live in six municipalities (New Taipei 4.04M, Taichung 2.87M, Kaohsiung 2.72M, Taipei 2.44M, Taoyuan 2.36M, Tainan 1.85M)
• 30% Land: Six municipalities occupy only 30.8% of Taiwan's total area
• 70% Tax Revenue: Six municipalities contribute 72% of national tax revenue

The remaining 16 counties and cities spread across 70% of the land but have only 30% of the population and 30% of tax revenue.

The Truth About Mass Population Migration

Population Changes in Six Municipalities (2020-2025):

• Taichung City: +189,000 people (annual increase 38,000, growth champion)
• Taoyuan City: +105,000 people (annual increase 21,000)
• Tainan City: +21,000 people (modest growth)
• New Taipei City: -12,000 people (beginning outflow)
• Taipei City: -60,000 people (five consecutive years of loss)
• Kaohsiung City: -87,000 people (transformation growing pains)

Harsh Reality for Non-Six Municipalities:

• Yunlin County: Lost 150,000 people over 30 years (730,000→580,000, 21% decline)
• Chiayi County: Lost 80,000 people over 20 years (560,000→480,000, 14% decline)
• Taitung County: Population dropped below 220,000, historic low

Four Urban Rise Models

Model 1: Political-Financial Type (Taipei Metropolitan Area)

Taipei leveraged its capital status to concentrate central government, financial headquarters, and media groups, forming a "political dividend" dominance.

Taipei Development Stages:

• 1960s: Central government relocated to Taiwan, political center established
• 1980s: Financial liberalization, foreign banks entered
• 1989: Xinyi Project Area, creating "Taipei Manhattan"
• 1996: MRT operation, Greater Taipei daily living circle

Current Dilemmas:

• Housing price-to-income ratio 15.86 times, 4th highest globally
• Lost 60,000 people from 2020-2025
• Youth outflow, accelerating aging

Nearly half of New Taipei's 4 million residents commute daily to Taipei, forming the world's largest inter-city commuting circle.

Model 2: Technology Industry Type (Hsinchu)

Hsinchu Science Park grew from 7 companies in 1980 to 600 companies in 2026, creating the "Taiwan Silicon Valley" miracle.

Development Trajectory:

• December 15, 1980: HSP officially opened
• 1987: TSMC entered, foundry era began
• 1990s: UMC, MediaTek IC design clustering
• 2000s: Panel, LED complete industry chains
• 2020s: New waves of AI, 5G, electric vehicles

HSP successfully created Taiwan's first "tech nouveau riche" class—average annual salary of NT$1.2 million, 80% higher than national average. But side effects are obvious: Hsinchu housing prices doubled in 5 years, severe traffic congestion, Hakka culture dilution.

Model 3: Livable Balance Type (Taichung)

Taichung is the most successful "latecomer" among the six municipalities. The 1996 decision to upgrade the 7th Redevelopment District from "sub-commercial center" to "new municipal center" completely changed its destiny.

Transformation Timeline:

• 1995: 7th District land consolidation completed (425 hectares)
• 2000s: City hall, council, courts entered 7th District
• 2008: HSR Taichung Station, 1 hour to Taipei
• 2010: County-city merger, population reached 2.67 million
• 2023: Population surpassed Taipei, became second largest city

7th District Success Factors:

• Transportation hub (Freeway 74, HSR convenient external connections)
• Government leadership (city hall, council, opera house settlement)
• Commercial clustering (Far Eastern, Shin Kong Mitsukoshi, Tiger City)
• Green planning (Qiuhonggu Park landmark effect)

Taichung's success secret was the "livability card"—housing prices only 40% of Taipei's, salaries 70% of Taipei's, mild climate, attracting many "Taipei escapees."

Model 4: Cultural Transformation Type (Southern Taiwan)

Tainan leveraged its 400-year historical foundation to develop an "ancient capital brand." With 21 national historic sites and countless street foods, it attracts 20 million tourists annually with tourism revenue exceeding NT$50 billion.

Kaohsiung transformed from heavy industrial port to creative marine city:

• 2001: Pier-2 Art Center, industrial warehouses became creative spaces
• 2017: Light rail opened, Taiwan's first urban light rail
• 2019: Asia New Bay Area, harbor revitalization

But transformation costs were severe: Kaohsiung's population dropped from 2.77 million in 2010 to 2.69 million in 2025, with continued youth outflow.

Cruel Numbers of Rural-Urban Disparity

Income Gap: Winner-Takes-All Reality

Average Annual Income Disparity (2023 Tax Data):

• Taipei City: NT$926,000 (highest nationally)
• Hsinchu City: NT$894,000 (tech nouveau riche effect)
• Hsinchu County: NT$768,000
• National Average: NT$642,000
• Yunlin County: NT$487,000 (lowest nationally)
• Taitung County: NT$493,000
• Chiayi County: NT$512,000

The highest and lowest differ by nearly double, with gaps widening. In 2018, Taipei-Yunlin gap was 1.5 times; within 5 years it expanded to 1.9 times.

Industry Structure Determines Destiny:

• Six municipalities: Finance, technology, services account for 75% of GDP
• Agricultural counties: Agriculture, traditional manufacturing account for 40% of GDP

A financial sector worker's annual salary often equals 3-5 times that of an agricultural worker.

Educational Resources: Unequal Starting Lines

Higher Education Concentration:

• Taipei City: 12 universities (NTU, NTNU, NCCU and other top-tier)
• New Taipei City: 8 universities
• Taichung City: 13 universities (NCHU, THU, FCU, etc.)
• Yunlin County: 2 universities (YunTech, TransWorld)
• Taitung County: 1 university (NTTU)

Elite High Schools Concentrated in Six Municipalities:
Of Taiwan's top 50 high schools, 42 are in the six municipalities. Jianguo High School, Taipei First Girls High School, and NTNU Affiliated High School are all in Taipei. Rural children must leave home to attend good schools.

Remote Area Education Crisis:

• 47 elementary schools nationwide had fewer than 50 students in 2023
• 4 elementary schools in Yunlin's Kouhu Township closed, students merged
• Taitung's Daren Township averages 8 students per class
• Hualien's Fengbin Township has a junior high first grade with only 3 enrolled students

Medical Resources: Life-Saving Inequality

Medical Center Distribution:

• Taipei City: 8 centers (NTU, VGH, MMH, etc.)
• New Taipei City: 4 centers
• Taichung City: 3 centers
• Kaohsiung City: 4 centers
• Tainan City: 2 centers
• Yunlin, Chiayi, Taitung, Hualien: 1 each

Physician Workforce Disparity:

• Taipei City: 42.3 doctors per 10,000 people
• Taitung County: 19.6 doctors per 10,000 people
• Hualien County: 21.8 doctors per 10,000 people

Remote area residents must drive 2-3 hours to cities for specialist care. The crucial "golden hour" for emergencies is often insufficient.

Taiwan's Lost Corners

Kouhu Township, Yunlin: Lost 40% Population in 30 Years

Kouhu Township was once an important aquaculture center in Taiwan, famous for clams and milkfish. But over 30 years, population dropped from 32,000 to 19,000—a 40% loss rate.

Decline Causes:

• Land subsidence: Over-pumping groundwater caused seawater intrusion, soil salinization
• Failed industry transformation: Traditional aquaculture couldn't compete with imports
• Poor transportation: 40-minute drive to nearest highway
• Youth exodus: No jobs forced migration to cities

Current Devastation:

• 38% residents over 65 (national average 16.9%)
• Only 1 elementary school left with 5 classes, 27 students total
• Health center doctor comes only 2 days per week
• Grocery store owner: "Young people all left, only elderly waiting to die."

Daren Township, Taitung: Final Guardian of Tribal Culture

Daren Township is Taitung's southernmost township with 95% Paiwan Indigenous residents. It preserves complete Indigenous culture but faces the most severe population loss.

Numerical Reality:

• Population dropped from 5,200 in 1990 to 3,100 in 2025
• Working-age population (25-64) only 1,400 left
• No high school in township; junior high graduates must board in Taitung City
• Average annual income NT$320,000, 3rd lowest nationally

Cultural Heritage Crisis:

• Less than 20% of youth speak fluent Paiwan
• Traditional weaving and carving skills lack successors
• Declining youth participation in tribal festivals

But Daren Township also has success stories: Tuban tribe's eco-tourism earns over NT$1 million annually; Xinyuan tribe's "Tribe E-Shopping" penetrates urban markets. The key is finding "local value."

Government Rescue Policy Overview

Forward-looking Infrastructure: 8-Year NT$880 Billion Gamble

In 2017, President Tsai Ing-wen launched "Forward-looking Infrastructure," investing NT$882.4 billion over 8 years, promising to reduce rural-urban disparities.

Key Projects:

• Rail construction: NT$424.1 billion (48%)
• Water environment construction: NT$250.7 billion
• Digital construction: NT$46.1 billion
• Urban-rural construction: NT$137.2 billion

Effectiveness Assessment:
✅ Success Cases:
Taichung Green Line MRT drove development along its route, Taoyuan Airport MRT strengthened Greater Taipei connections, Hualien-Taitung railway electrification shortened distances

❌ Problem Cases:
Kaohsiung Light Rail severely loss-making with daily ridership only 40% of projections, some water environment projects became "mosquito constructions," digital budget too low with digital divide remaining

Local Revitalization: NT$10 Billion Turnaround Plan

2019 was the "First Year of Local Revitalization." The National Development Council invested NT$10 billion, aiming for young people to "return, stay, and thrive."

Success Cases:

• Nanzhuang, Miaoli: Hakka culture + B&B industry, annual visitors exceed 1 million
• Gukeng, Yunlin: Coffee industry cluster, youth returning home
• Wutai, Pingtung: Rukai cultural experiences, tribal economic recovery

Reality Challenges:
Few success cases, most townships lack distinctive features; limited funding unable to fundamentally transform industrial structures; transportation and medical infrastructure can't be solved through creativity alone.

Root Causes of Rural-Urban Divide

Transportation Geography Determines Destiny

Highway Effect:
Chiang Kai-shek Expressway opened in 1978, rapidly developing cities along the route; Second Highway opened in 1997, benefiting Changhua, Yunlin, and Chiayi; but eastern Taiwan and offshore islands remain "unreachably distant."

HSR Revolution:
HSR opened in 2007, creating western Taiwan daily living circle; Taipei-Kaohsiung 1.5 hours enabled companies to establish southern offices; HSR special zone housing prices soared; but non-stop counties became relatively marginalized.

Eastern Taiwan Dilemma:
Hualien-Taitung railway is single-track with many curves, requiring 4 hours Taipei-Taitung; Suhua Highway improvements still twice as slow as western Taiwan; no international airport hampers external connections.

Scale Economy's Iron Law

Public Service Threshold:
Hospitals need at least 200,000 people served for efficiency; universities need at least 30,000 students for complete departments; department stores need at least 500,000 people in catchment area for profit.

When population falls below threshold, public service quality inevitably declines, creating vicious cycles: deteriorating services → population loss → worse services.

Future Solutions: Possibilities for Rebalancing

Digital Nomadism: Redefining Work Location

COVID-19 catalyzed the "remote work revolution." When work is no longer location-bound, remote areas regain opportunities.

Success Cases:
Yilan-based Taipei office workers migrate to enjoy countryside; Taitung Chishang tech workers practice "digital nomadism" boosting consumption; Penghu B&Bs combine co-working spaces attracting remote workers.

Key Conditions:
High-speed internet (fiber, 5G), living amenities (coffee shops, convenience stores), cultural activities (can't be just countryside).

Distinctive Industries: Irreplaceable Value

Taitung Chishang Rice: From ordinary rice to premium brand at NT$300/kg
Nantou Sun Moon Lake Black Tea: From declining tea gardens to tourism factories earning hundreds of millions annually
Pingtung Cacao: From zero to international chocolate awards

Success commonalities: leveraging geographical advantages, combining cultural stories, using technology marketing.

Quality of Life: Redefining Success

Younger generations are changing their definition of "success." Not just pursuing high salaries, but emphasizing quality of life and work-life balance.

Emerging values: slow living pursuing spiritual richness over material; environmental protection valuing sustainable development; local support for local industries and culture; creativity using passion to create value.

This provides new opportunities for rural development. As urban living costs rise and pressures intensify, rural tranquility, nature, and human warmth become scarce resources.

Conclusion: Reimagining Taiwan's Space

Taiwan's rural-urban divide is a development inevitability, but not destiny. Seventy years ago, we transformed from agricultural to industrial society, creating economic miracles while paying the price of rural-urban imbalance. Now transitioning from industrial to post-industrial society offers opportunities for rebalancing.

The key isn't making rural areas into cities, but helping rural areas find their own value positioning. Cities provide efficiency and opportunities; rural areas provide quality and meaning. These are complementary, not competitive relationships.

Though small, Taiwan is sufficiently diverse. From bustling Taipei's Xinyi District to tranquil Taitung's Chishang, from tech powerhouse Hsinchu to ancient capital Tainan, each place has its own story and value.

Rural-urban disparities can never be completely eliminated, but gaps can become differences, differences can become characteristics, and characteristics can become advantages. This might be the true solution for Taiwan's urban-rural development.

References

• How Big Is the Rural-Urban Divide? 8 Harsh Realities of Taiwan's Townships - NPOst
• List of Administrative Divisions of Taiwan by Population - Wikipedia
• North-South Divide in Taiwan - Wikipedia
• Ministry of Interior Department of Household Registration Population Statistics
• NDC Taiwan Local Economic Development Report
• Science & Technology Policy Perspectives - Analysis of Taiwan's Urban-Rural Development Disparities